How does carat affect the price of a diamond and what are carat weight categories?

After checking some diamond price comparison sites I have a feeling that the relation between carat weight and prices isn't linear, that is to say that sometimes an increase of weight can double a diamond's price, while sometime a rather similar increase has a much less price increasing effect. To me it makes sense that the price difference between 1/5 (20 points) and 1/4 (25 points) carat weight should be much bigger (ratio-wise) than an similar increase of 5 carat points between 95 points and 1 carat (100 points), because the former size increase is much more significant than the latter. Somehow it seems that as the diamond is bigger, any size increase has a bigger price increasing effect. Is this true and what sense does it make?

Answers (1 - 2 of 2)

SteveA July 10, 2010

It is true, as the diamond gets bigger, every little size increase generates a steep price rising. I don't know if it makes sense or not, but I guess that with small diamonds modifications are less crucial. A 20 points or a 25 points diamond are to insignificant in order to generate a big price gap. The relation between price and size is indeed not linear, in big diamonds every size change has a huge impact on price.

This issue is clearly presented in a diamond's carat weight categories. The exponential diamond price increase is noticeable in between distinct size ranges, while within the range changes are linear. Complicated, ahh?

Different prices indexes use different carat categories, so I can't really state universal categories here. I think that the Rapaport Index has 0.5-0.99 and 1-1.49 carat as two different diamond size categories for example. Let's assume that 1 carat of a certain diamond (with distinct cut, color, clarity and other important features) in the 0.5-0.99 carat category is worth $1000. This means that a 0.5 carat is worth $500, 0.6 carat is worth $600 and 0.99 carat is worth $990. But then in the next carat range a the same diamond carat is worth more, let's say $1500 per carat. A 1.49 carat diamond is then worth $2235 (1.49*1500), a 1.2 carat is worth $1800 (1.2*1500) and 1 carat is worth $1500. You can see that between 0.99 and 1 carat there's a price jump of $500! This shows that round diamond sizes are much more esteemed and valuable than 'almost round' numbers such as 0.99, but also shows the huge price gap between one carat range and the adjacent one.

Jeff rI July 4, 2010

This is why many diamond production companies are obliged to polish "full digit" carat diamonds and often prefer to polish a poor cut diamond, just not to lose carat points and have the diamond reduced to an "unappealing" size. So many diamond experts know this, diamond consumers are constantly warned not to purchase such full digits carat diamonds, but yet diamond companies continue with the same standards. I guess there are some foolish diamond consumers out there still...