Grading systems and 'gaming' them: An eternal story?

[Paul-Antwerp]

This post is long (my apologies but it is important) and contains a lot of ideas, that possibly could warrant an article. I however prefer to bring these points forward first, so that your feedback and reaction can influence the potential future article.

Introduction:

Regular posters on PS sometimes highlight how the industry ‘games’ certain grading systems, mostly cut-grading systems. What is this ‘gaming the system’ actually? Here are examples.

Example 1: The GIA cut-grading system

GIA introduced a cut-grading-system for rounds in 2006. It has five possible grades; Poor, Fair, Good, Very-Good & Excellent, with most cutters aiming for the Excellent-grade, if not the Very-Good grade.

According to GIA, the division into five grades is based upon the number of categories humans are able to clearly discern. Granted, this is a worthy explanation, but with basic studies which are partially flawed and the further simplification of converting a 3D item with 57+ measurements into a handful of averaged and rounded 2D data points for ease-of-repeatability (well-documented on Pricescope) the best one can say is that the system is not foolproof. I would say that the general sentiment on this forum is that an EX cut-grade by GIA is a nice start, but the stone needs to be further examined via HCA and further photographic evidence. So briefly, within the EX grade of GIA, there are still various levels of cut-quality that warrant further investigation.

With GIA being the foremost authority in lab-grading however, the GIA cut-grade is for most diamond cutters the final word. In essence, on the worldwide diamond-market, a potential premium exists for an EX grade, but often not for further refinement. It is thus logical that many diamond cutters will aim to obtain this EX grade if in any way possible, without paying attention to further refinement.

This logical and, in this case, that human reflex is aided by technology. The GIA system is very predictable and has been incorporated in all brands of diamond-planning technology. After scanning a rough stone, most factory systems will calculate the biggest stone one can obtain while staying inside a specific cut-grade; in this example GIA EX. For most rough stones the advice will be a combination of the deepest pavilion and crown angle combination. For the same diameter, this will yield the highest weight.

As a result, we see an oversupply of such "steep-deep" combos in GIA-EX. On PS, it is very well known that these generally are less nice, but on the worldwide diamond-market, there is no problem selling them... After all they have the coveted "GIA EX" grade. Given that higher yield out of the same rough, the seller also has room to supply them at slightly lower prices, which even enhances their appeal.

Here on PS, we often describe such stones as the result of ‘gaming the system’. We can probably argue whether that ‘gaming’ takes place with intent, but the fact is that it is sufficient for many cutters to produce the minimum-level of the GIA EX-grade. Considering this result; a majority of diamonds produced near the minimum-level of the grade, it can be questioned whether the resulting production is in line with GIA's original intent of creating a clearly discernable Excellent grade.

My conclusion is that the creation of the system has had a consequence which was not the intention of the creators of the system.

Example 2: The AGS cut-grading system

The above series-of-events was already observed on diamond-discussion forums in the late 1990’s and early 2000’s, when assessing stones with the old version of the AGS Ideal grade. In the same way, AGS had a 2D cut-grade (like the current GIA system) which resulted in an overwhelming production of steep-deep AGS Ideals.

Probably this reality led the AGS to develop a new cut-grading system, introduced in 2005. According to AGS tradition, the system has 11 cut-grades, ranging from 10 to 0 (Ideal), but in practice, only the top Ideal-grade seriously has commercial appeal.

Because of the 3-dimensional nature of the new AGS system, it is a bit more difficult to understand and predict grades. But after time intelligent cutters have also found out where the minimum-levels of this Ideal-grade are. And once again, the logic of human nature leads to productions being targeted at this minimum-level.

At the same time, within the AGS Ideal grade, there are still various levels of performance. This is only natural, because the grade mainly depends upon an assessment of brightness only, with almost none of fire and absolutely none of scintillation. The same applies for GIA, by the way. Very often, AGS-Ideal is represented as an automatic H&A, which does not need to be the case. And even AGS accepts that there are still different levels within the top-grade, but prefers to describe that as differences in ‘taste’. And granted, further refining of the AGS-system would probably drive even more of their grading-business away to GIA (already a huge problem for AGSL) so I can fully understand their human reaction.

Halfway-conclusion

Grading-systems with a definite top-grade have an adverse effect. Supply will tend to concentrate on achieving the minimum-level of that top-grade, in the absence of a stimulus to do better than that. This can be described as ‘gaming the system,' as if there were malicious intent to deceive. I think that the phenomenon definitely exists, but I would attribute it to simple human logic, not evil or malice, which also makes it more difficult to combat.

Final question: Pricescope as a grading-system

When we observe our favorite website Pricescope, and especially the RockyTalky forum, it is a mini-market for diamonds; a market with its own unwritten rules and understandings. In this mini-market, the advice given on the forums can be regarded as a grading-system of its own.

Here, we do not have grades ranging from Poor to Excellent or 10 to 0, but we can roughly divide the advice in three categories:
- The lowest grade is that of 'Fail.' Do not buy this stone, we will present you with better and cheaper alternatives.
- The middle grade is that of ‘More info needed. Please check further, if possible in person’.
- The top-grade is ‘Buy’, ‘Yummy’, ‘Kewl’, ‘Go for It’

In this mini-market for diamonds, we have a limited number of specialized vendors, aiming specifically to sell via the forum. This may prove very beneficial for them because a sale to a satisfied PS-consumer can lead to positive bias and thus free publicity, even to non-Pricescopers.

But just like with other cut-grading systems, this has influenced the average supply. Reaching the top-grade of 'Buy' on PS is the goal so, logically, vendors need to figure out what the minimum-level of this grade is. And, since they are intelligent people, more and more have figured this out.

Given that we are describing human reactions to systems, it is logical to assume that, over-time, supply of diamonds on PS is increasing at or near the minimum-level of the Pricescope 'Buy' grade. And, indeed, we've seen more and more supply on PS relaxed in cut-quality to achieve the minimum-level of the Pricescope 'Buy' grade. This has happened over the past years and is increasingly happening today.

Interesting to note that, unlike the lab cut-grading systems, the PS-system also involves steering people to minimum-levels of color and clarity arrived-at by group consensus. So, just as there are an abundance of diamonds aimed to achieve the minimum-level of 'Buy' in cut quality the number of available In-House diamonds also bulges at the 'Buy' FGH colors and SI-VS clarities; where options outnumber all other clarity grades by a factor of 10 to 1.

Important to note in this regard is that the PS-system is not set in time, but that it evolves over time. With vendors pushing the minimum-level envelope, it naturally evolves to less strictness.

Summary

When grading-systems try to describe a certain reality in human behavior or action (Cut is a typical example of human action), the existence of the system generally has the effect that it pushes human behavior in a natural way towards the minimum permissible-level of a certain grade. Just like most drivers will tend to go between 75-80mph in a 70mph speed-limit zone.

So what is described as ‘gaming the system’ on PS (when talking about GIA and AGS) also exists at the level of Pricescope too. The advice on the PS-forums is also a grading-system, and indeed, vendors have turned it into an art to game this system too. I think that it is good to realize this and possibly discuss strategies to counter this natural evolution.

Live long,

 

[Garry H (Cut Nut)]

Interesting Paul.

Sergey has been saying for a very long time that the AGS usage of the term "Ideal" leads infact to the concept that having achieved that status, there is or can be nothing better.

I am sure that we will see better performance in all or some factors in diamond cuts in the future. And I hope and believe that this will be measurable or quantifyable with scientific and transparent methodology.

PS I think your discussion on AGS fire and scintillation is a bit harsh - the proportions that produce AGS best brilliance are never without some measure of fire and scintillation. However it is true that AGS science seems wanting in those areas. For example I have been working on a cut that probably would fail on 2 measures but more than make up on another - the AGS penalty system will say this is a bad cut because they have no open ended-ness - the idealist failing.

 

[natascha]

Paul this was a very interesting and clarifying post. I hope it will soon become an article that can help consumers.

Let me preface this by saying that I am a complete noob when it comes to top cuts in modern diamonds, I am an antic nut and actually really dislike the arrows in modern round cuts. What I am is an economics student and my way of seeing the world is quite affected by that. I assume that all I am going to say, you have already considered.

My basic assumption is that everyone will always do the minimum required of them to achieve the break even level after a cost- benefit analysis. Also the market for the absolute best cuts is a comparatively small niche market that most times is both savvy and price sensitive. This than leads to the conclusion that for most cutters it is more efficient and profitable to instead aim for a larger market that is not as savvy and does not have as high requisites. This market is comprised of buyers that are not as knowledgeable, where a GIA excellent is enough reassurance that they have the best cut. Therefore it is most profitable to cut the minimum required of this target market instead of cutting the best possible.

This of course is my opinion, but I would say that >95% of the population do not care to know the different cut quality in the excellent level and most would not even notice the difference. They are then not willing to pay a higher price nor to learn the differences between the best cuts. We can compare this to diamond color assuming a customer that wants a white stone and disregarding mind clean issues. We know that a D will be completely white but most customers will not see the differences until about an I ( not comparing side by side to a higher color), well it is the same with cut most customers do not see the small differences in cut quality after a certain level and most do thus not care. Should they then buy a D stone or an I, if for them there is no difference or should they buy the absolute best cut or just an excellent if they do not notice the difference.

The problem for me resides not in the differences in the best level given by the labs but in many peoples belief that all stones of the same level are equal. If the consumers know that there are differences then they can make the choice to either invest time, money and effort into gaining the knowledge necessary to find one of these diamonds( or come over here and let the experts guide them) or they can choose to walk into a jeweler ask for an excellent cut and buy it with the minimum of fuss.

 

[Paul-Antwerp]

Garry,

A reply only 30 minutes after my long post was started. How do you do that?

Live long,

P.S. Care to come back after you let my post sink in?

 

[Paul-Antwerp]

Natascha,

Originally, I am also an economics-student, and in that sense, you probably immediately sensed how my post is actually a description of human behaviour.

The only point I disagree with is that most people would not notice the difference in appearance. In all three 'grading-system' described, the difference is readily observable, but granted, the investment to examine it is required.

Nice post.

Live long,

 

[natascha]

Paul- I think I was a bit unclear before. I do not mean that a normal consumer will not be able to see the difference side by side using different light situations. I meant that most normal consumers will not see the difference on their hand only using comparisons from normal life situations.

Or do you mean that ex Bertha living in a normal town who has a GIA excellent will see the differences in her stone compared to her friend Marie that has a better cut, without direct comparisons just in normal viewing situations?

Thank you for your thought provoking posts.

 

[Garry H (Cut Nut)]

Garry,

A reply only 30 minutes after my long post was started. How do you do that?

Live long,

P.S. Care to come back after you let my post sink in?

20 minutes to read yours, and 10 minutes to write mine Paul.

I am interested if you have any responses to me, since that is how we play tennis downunder, and how we enjoy your country-women too

 

[Garry H (Cut Nut)]

Paul this was a very interesting and clarifying post. I hope it will soon become an article that can help consumers.

Let me preface this by saying that I am a complete noob when it comes to top cuts in modern diamonds, I am an antic nut and actually really dislike the arrows in modern round cuts. What I am is an economics student and my way of seeing the world is quite affected by that. I assume that all I am going to say, you have already considered.

My basic assumption is that everyone will always do the minimum required of them to achieve the break even level after a cost- benefit analysis. Also the market for the absolute best cuts is a comparatively small niche market that most times is both savvy and price sensitive. This than leads to the conclusion that for most cutters it is more efficient and profitable to instead aim for a larger market that is not as savvy and does not have as high requisites. This market is comprised of buyers that are not as knowledgeable, where a GIA excellent is enough reassurance that they have the best cut. Therefore it is most profitable to cut the minimum required of this target market instead of cutting the best possible.

This of course is my opinion, but I would say that >95% of the population do not care to know the different cut quality in the excellent level and most would not even notice the difference. They are then not willing to pay a higher price nor to learn the differences between the best cuts. We can compare this to diamond color assuming a customer that wants a white stone and disregarding mind clean issues. We know that a D will be completely white but most customers will not see the differences until about an I ( not comparing side by side to a higher color), well it is the same with cut most customers do not see the small differences in cut quality after a certain level and most do thus not care. Should they then buy a D stone or an I, if for them there is no difference or should they buy the absolute best cut or just an excellent if they do not notice the difference.

The problem for me resides not in the differences in the best level given by the labs but in many peoples belief that all stones of the same level are equal. If the consumers know that there are differences then they can make the choice to either invest time, money and effort into gaining the knowledge necessary to find one of these diamonds( or come over here and let the experts guide them) or they can choose to walk into a jeweler ask for an excellent cut and buy it with the minimum of fuss.

Natascha perhaps the old wine analogy works for you? Some people of the same means will spend 3 or 5 times more for each bottle than others who may not really be able to tell the difference or are not prepared to pay more for such a difference.

 

[diagem]

When only allowing a small range of proportions to achieve the "top" grade..., it limits the possibilities (period). For the good or bad.
Usually cutters get their material after it was planned and prepared by rough-planners, perhaps thats why I notice most cuts are cheap on crown heights. I believe it has more to do with lack of knowledge than intention for purposely gaming the grading system..., these cutters genuinely believe they are cutting a top Diamond cut and the effort proves this.
It still boggles my mind how manufacturers are still purchasing prepared (sawn) rough assortments for their production

I tend to agree with Garry's and Sergey's thoughts that the top grades at present (eg 3x or 3x0) limits advancements.

But contrary to Garry..., I witnessed openness and willingness to listen on part by AGS's laboratory staff. I am currently working on a new cut as well..., AGS staff are listening and were even willing to move on some limitations they enforce while taking in account specific design factors. I found professionalism and willingness to further explore new directions that are not in the norm/mainstream of the classic angle combinations.

 

[Lula]

When only allowing a small range of proportions to achieve the "top" grade..., it limits the possibilities (period). For the good or bad.
Usually cutters get their material after it was planned and prepared by rough-planners, perhaps thats why I notice most cuts are cheap on crown heights. I believe it has more to do with lack of knowledge than intention for purposely gaming the grading system..., these cutters genuinely believe they are cutting a top Diamond cut and the effort proves this.
It still boggles my mind how manufacturers are still purchasing prepared (sawn) rough assortments for their production

I tend to agree with Garry's and Sergey's thoughts that the top grades at present (eg 3x or 3x0) limits advancements.

But contrary to Garry..., I witnessed openness and willingness to listen on part by AGS's laboratory staff. I am currently working on a new cut as well..., AGS staff are listening and were even willing to move on some limitations they enforce while taking in account specific design factors. I found professionalism and willingness to further explore new directions that are not in the norm/mainstream of the classic angle combinations.

Interesting thread, Paul.

Diagem, can you please explain what you mean by the part I highlighted in red above, and also explain how a stone that is "cheap on the crown height" would look/perform compared to one not cut that way? Thanks.

 

[yssie]

Paul - thank you for posting this: it is, as Natascha says, informative and thought-provoking. I am just another consumer with an opinion, and I'm unsure if that's what you're looking for, but I confess I simply can't resist chiming in with my own 2c - and perhaps you or other readers will find something in it that is food for thought.


In response to your points - I absolutely agree that 'gaming the system' is the natural response of an entity that is out to get the most 'bang for its buck', so to speak. Fulfill minimum expectations and reap the rewards.. it is a unique operation that sees the virtue in consistently going the extra mile for little or no reward. However, in this particular industry, I strongly feel there are two sides to the coin - and that it's a losing proposition to try to combine them into a single study.

The first question would be: what is the diamond doing with the light that goes into it? This question, I think, is not going to be much of a question at all in a few years. Technology has advanced enough that a fully describing, accurate and precise ray-tracing model that considers absorption due to body colour, ray paths, inclusions, fluor/polarisation/... is, in my opinion, already certainly possible to produce, the wait is for the cost of such design and manufacture for wide-range use to become feasible. And Frankly, also in my opinion, the industry will be much the better for it - there's so much that is opaque to the customer who cares to question! But then, I put no stock in X Factors and/or romancing what is ultimately a glorified rock

The second question is much less transparent, and I simply can't forsee any universally recognised and accepted resolution, because of the very nature of the issue: What do our eyes see the diamond doing with the light that goes into it, and what do our eyes prefer? If anyone's going to get closer to nailing this one, I think I'll put my lot in with the biologist, neurologist, and electrical engineer team! The first 'level of disagreement', if you will, is that everyone sees things differently. The second level is that everyone interprets what they see differently, and the third is that everyone prefers to see different things. I don't like skinny arrows. And I vastly prefer colour to white light return. And I like strong blue fluor. There's nothing wrong with stones of these types, and many people do prefer them, I'm just not one of them.. Show me a cut grading system that rewards long lower girdle facets and I'll be the one choosing a "poorly" cut stone.. because I've looked at - well, at least hundreds of stones, I've ogled them, admired them, and in the process I've discovered which nuances I prefer to see, and which I don't, so I can make educateded choice about my personal preferences. Which may not be anyone else's.

Which brings me to my real point here - what is the point of 'grading cut'? Binary Good vs. Bad, yes, that's easy enough, and the various tools we can use are of tremendous help here. But what about the flavours within Good? Grading 'cut' is problematic precisely because it is an effort to put a price on both questions, and there's just no way to comprehensively answer that second, and yet that's half the question! What AGS might call "levels of performance within Ideal" I might call "flavours of performance" because there are people out there that would choose those stones consistently over "higher performers" - if they cared to take the time to inspect, of course. By labelling proportions and flavours of light output, contrast, scintillation (however you define them exactly) as "superideal", "ideal", "excellent", "very good", "get it!" we are funneling any and all prospective consumers right back onto those binary Do This, Not That tracks (by whatever metrics we use, whomever 'we' are).


I don't want to derail this thread but I would like to bring up a third point that hasn't yet been addressed, and that I think is very pertinent to this discussion of "gaming the system", from my perspective as an educated consumer. The third - and really the most significant, in the real world of consumer concerns - question is that of budget, and how to decide what to prioritise to maximise that budget. The "ideal" that PS groupthink aspires to is unquestionably Hearts and Arrows - though few, including me, have a firm grasp of what, precisely, that entails, thanks in-part to industry-wide opacity in definition, and in larger part to the fact that what it entails also depends on which vendor we're talking about! Paul, you have asserted before (and I agree) that different vendors and different brands marketed as H&A have different requirements, and some of those brands require stricter specifications that their stones must conform to, and thus are "safer" to buy from blindly as you know exactly what you're getting. I will state that after having looked at lots of stones from different brands, I can't see the differences between certain proportions of "near-H&A" and "true H&A", from professional pictures and using my hand-held scope, in various types of lighting, even after being told what to look for. I may be new to the world of diamonds, but I have excellent close-range vision, a good eye for detail, and a definite interest in trying to pinpoint and diagnose any differences that I do see.. and not once have I been able to specifically designate those differences as attributable to "perfect hearts and arrows" vs "some slightly clefted hearts"/"some slightly thicker Vs"/some slightly mismatched arrow shafts and heads"... and I simply cannot be the only one who does not see these differences, and is therefore unable justify the premium that branded H&As command simply for the sake of those hearts and arrows - there are other good reasons for me to buy a branded in-house stone, but these stones are not called "Branded In-House Stones With Excellent Policies", they're called "Superideals" and "H&As" (mind, if we could all have Branded In-House Superideal H&A Stones with Excellent Policies we would, but the reality is that they cost *more* - usually lots more, sometimes enough to go up a clarity/colour grade!)

But.. when new members come to PS for advice, they quickly pick up that Branded "Superideal" H&A is the PS standard for best of the best. Without any understanding of what it means for them re. Question 2. And PS vendors are certainly aware of this "PS standard", and can count on PS groupthink to push these stones, with their sometimes frankly shocking premiums, at prospective consumers without regard to what those consumers' eyes can see, or what they prefer, or that if they are like me, unable to spot the differences even after being told what to look for, their money is better funneled into something their eyes *can* appreciate. IMO this is another example of vendors perfecting the art of 'gaming the system' - that is, the PS standard, right here on this board.


ETA: sorry for the novel, folks.

 

[denverappraiser]

This’ll be a cool article Paul. I look forward to seeing it.

There is a strange but very definite relationship between consumer demand and grading. The labs, in this case GIA and AGSL, are trying to define the ‘best’ for the benefit of consumers. The dealers quite reasonably charge a premium for that, suppliers are interested in supplying things that can command this premium, and consumer taste is shaped to desire it. It’s not just about diamonds. This is the process used for manufacturing consumer taste in nearly everything and we see it in cars, food, clothing etc.

This is no less obvious than the clarity grading scale we’re all familiar with and which has been in place for 80 years. In the standard GIA system there are 11 grades. For most people, the top 5 (F, IF, VVS1, VVS2 and VS1) are completely indistinguishable from one another, even with the aid of a microscope unless you tell them exactly what to look for and maybe not even then. Nonetheless, this consistently accounts for a whopping doubling of the price. Enough people are willing to pay it that the sellers of IF’s aren’t inclined to drop the prices to get a sale so it seems to be working. At the same time, we get TONS of questions here trying to subdivide the SI grades over what is eye visible, an attribute that never has been part of clarity grading. If our scale had a few more steps down in the SI1-I1 range and fewer at the top, would consumer demand have developed differently? Would there be different things that result in a premium or a discount? I suggest that it would, and that this would better reflect what people really seem to be concerned about.

There are other attributes, like transparency or 'crystal' that are generally ignored completely and that have no generally agreed upon scale at all. IF there existed such a scale, it's certain that the higher ranking stones would trade at a premium, even though those same stones don't now and it DOES affect the beauty of the stone.

 

[Lula]

Yssie, I may be wrong, but I think what Paul is referring to goes beyond H&A patterning or optical symmetry. I agree with you, paying a premium for optical symmetry alone does not guarantee that a consumer will get a beautiful diamond, in terms of "performance." All it guarantees is that a consumer will get a stone with a perfect H&A pattern.

 

[yssie]

Yssie, I may be wrong, but I think what Paul is referring to goes beyond H&A patterning or optical symmetry. I agree with you, paying a premium for optical symmetry alone does not guarantee that a consumer will get a beautiful diamond, in terms of "performance." All it guarantees is that a consumer will get a stone with a perfect H&A pattern.

I do think that - but that last part of my post was in response to Paul's final proposition of vendors gaming the PS system. My intent was truly not to derail this thread into (yet another) discussion of the merits of H&A, just provide an example from my perspective, I hope that is clear. I realise it's an unpopular view that's probably going to go over like a ton of bricks.. but I think worth stating anyway.

 

[diagem]

When only allowing a small range of proportions to achieve the "top" grade..., it limits the possibilities (period). For the good or bad.
Usually cutters get their material after it was planned and prepared by rough-planners, perhaps thats why I notice most cuts are cheap on crown heights. I believe it has more to do with lack of knowledge than intention for purposely gaming the grading system..., these cutters genuinely believe they are cutting a top Diamond cut and the effort proves this.
It still boggles my mind how manufacturers are still purchasing prepared (sawn) rough assortments for their production

I tend to agree with Garry's and Sergey's thoughts that the top grades at present (eg 3x or 3x0) limits advancements.

But contrary to Garry..., I witnessed openness and willingness to listen on part by AGS's laboratory staff. I am currently working on a new cut as well..., AGS staff are listening and were even willing to move on some limitations they enforce while taking in account specific design factors. I found professionalism and willingness to further explore new directions that are not in the norm/mainstream of the classic angle combinations.

Interesting thread, Paul.

Diagem, can you please explain what you mean by the part I highlighted in red above, and also explain how a stone that is "cheap on the crown height" would look/perform compared to one not cut that way? Thanks.

Ideal situation..., a rough octahedron needs be sawn (divided) into two parts producing two polished Diamond cuts...
With present rough price volatility manufacturers must maximize their yields hopefully resulting in a potential ex/0 cut consisting a minimum allowed crown height while allowing a significant heavier second stone from the same rough piece.

 

[Karl_K]

More people figuring out what PS'ers want is a great thing!
Competition is great for consumers!!!
I would love to see 50 vendors all providing the details, policies and service that PS'ers have came to want and expect.
When you have 1 or 2 or even 3 or 4 vendors you lose price competition and indeed that did happen in the past with rising margins for vendors over stones that did not get PS approval.
Then a competitor came in with lower prices and stones that PS consumers wanted and the result was a lot of yelling and screaming.

Bring on the competition!!!!!!

 

[Garry H (Cut Nut)]

This’ll be a cool article Paul. I look forward to seeing it.

There is a strange but very definite relationship between consumer demand and grading. The labs, in this case GIA and AGSL, are trying to define the ‘best’ for the benefit of consumers. The dealers quite reasonably charge a premium for that, suppliers are interested in supplying things that can command this premium, and consumer taste is shaped to desire it. It’s not just about diamonds. This is the process used for manufacturing consumer taste in nearly everything and we see it in cars, food, clothing etc.

This is no less obvious than the clarity grading scale we’re all familiar with and which has been in place for 80 years. In the standard GIA system there are 11 grades. For most people, the top 5 (F, IF, VVS1, VVS2 and VS1) are completely indistinguishable from one another, even with the aid of a microscope unless you tell them exactly what to look for and maybe not even then. Nonetheless, this consistently accounts for a whopping doubling of the price. Enough people are willing to pay it that the sellers of IF’s aren’t inclined to drop the prices to get a sale so it seems to be working. At the same time, we get TONS of questions here trying to subdivide the SI grades over what is eye visible, an attribute that never has been part of clarity grading. If our scale had a few more steps down in the SI1-I1 range and fewer at the top, would consumer demand have developed differently? Would there be different things that result in a premium or a discount? I suggest that it would, and that this would better reflect what people really seem to be concerned about. One reason that very high clarity has such a price differential is that major ethnic groups that have been both involved in the diamond business and are big customer bases is this: they always refer to clarity by the word PURITY. This is an almost is or actually is a religious reference.

There are other attributes, like transparency or 'crystal' that are generally ignored completely and that have no generally agreed upon scale at all. IF there existed such a scale, it's certain that the higher ranking stones would trade at a premium, even though those same stones don't now and it DOES affect the beauty of the stone.

Hi Neil,
Being your usualy thought provoking.
I agree and add that without adequate and simple grading systems pricing and demand usually do not reflect differences when they are hard to compare.
For instance color in large +5ct stones is easily seen and seems to be properly priced by the market. High level Cut is still hard to communicate, but cut pricing has improved since I wrote this page a decade ago: http://diamond-cut.com.au/26_market.htm

 

[diagem]

But.. when new members come to PS for advice, they quickly pick up that Branded "Superideal" H&A is the PS standard for best of the best. Without any understanding of what it means for them re. Question 2. And PS vendors are certainly aware of this "PS standard", and can count on PS groupthink to push these stones, with their sometimes frankly shocking premiums, at prospective consumers without regard to what those consumers' eyes can see, or what they prefer, or that if they are like me, unable to spot the differences even after being told what to look for, their money is better funneled into something their eyes *can* appreciate. IMO this is another example of vendors perfecting the art of 'gaming the system' - that is, the PS standard, right here on this board.

PS vendors are not just aware of the "PS standard", they are responsible for setting these standard here. And IMO with just.
You sound like you question the premiums for specialty cut Diamonds including the added value perks that come with each buying experience..., may I ask why you believe the premiums are "shocking"?

 

[yssie]

But.. when new members come to PS for advice, they quickly pick up that Branded "Superideal" H&A is the PS standard for best of the best. Without any understanding of what it means for them re. Question 2. And PS vendors are certainly aware of this "PS standard", and can count on PS groupthink to push these stones, with their sometimes frankly shocking premiums, at prospective consumers without regard to what those consumers' eyes can see, or what they prefer, or that if they are like me, unable to spot the differences even after being told what to look for, their money is better funneled into something their eyes *can* appreciate. IMO this is another example of vendors perfecting the art of 'gaming the system' - that is, the PS standard, right here on this board.

PS vendors are not just aware of the "PS standard", they are responsible for setting these standard here. And IMO with just.
You sound like you question the premiums for specialty cut Diamonds including the added value perks that come with each buying experience..., may I ask why you believe the premiums are "shocking"?

I certainly don't question the premiums for added value perks, I think that is an excellent reason to choose a branded stone. As is buying for the hearts and arrows, if that is important because it's 'mind-clean' or that person can in fact appreciate the difference and is willing to pay extra for it. I question anyone blindly buying anything without seeing it (or the effects of it, anyway) in-person first, be it colour, clarity, carat, cut, or optical symmetry. We see enough examples on RT of new buyers who have presumptions about all those things, and are sent on one railroad track or another depending on the responder's priorities...we all try to stay unbiased, but I don't think that's a humanly possible standard to consistently achieve.

I do find the premiums on some branded stones to be shocking, yes, and it absolutely irks me that people are often encouraged to pay these premiums without knowing if they're actually getting a stone their eyes would prefer above others - whether those eyes would prefer an H SI to an I H&A, or an SI1 to an SI2. Personal preference should come above all else, above anyone's standard of good/better/best, be that GIA's, AGS's, or PS's.

PS is an incredible resource of knowledge into this industry, and it is indeed a privilege to be privy to some of that knowledge! But, in the end, dispersion is dispersion, refraction is refraction, and I am a numbers person: there is nothing about any diamond that is magical beyond what my eyes tell me they can see, so I will trust my eyes over branding, marketing, or lack thereof.

 

[slg47]

I certainly don't question the premiums for added value perks, I think that is an excellent reason to choose a branded stone. As is buying for the hearts and arrows, if that is important because it's 'mind-clean' or that person can in fact appreciate the difference and is willing to pay extra for it. I question anyone blindly buying anything without seeing it (or the effects of it, anyway) in-person first, be it colour, clarity, carat, cut, or optical symmetry. We see enough examples on RT of new buyers who have presumptions about all those things, and are sent on one railroad track or another depending on the responder's priorities...we all try to stay unbiased, but I don't think that's a humanly possible standard to consistently achieve.

I do find the premiums on some branded stones shocking, yes, and it absolutely irks me that people are often encouraged to pay these premiums without knowing if they're actually getting a stone their eyes would prefer above others. Personal preference should come above all else, above anyone's standard of good/better/best, be that GIA's, AGS's, or PS's.

PS is an incredible resource of knowledge into this industry, and it is indeed a privilege to be privy to some of that knowledge. But, in the end, dispersion is dispersion, refraction is refraction, and there is nothing about a diamond that is magical beyond what my eyes tell me they can see, so I will trust my eyes over branding, marketing, or lack thereof.

yssie I'm afraid this is just how people operate? people are always willing to pay more for something that is perceived as 'better' by virtue of a fancy label, or just by virtue of being more expensive.

as far as researching purchases...I think many people who come on RT are 1) not all that interested in how diamonds reflect light and 2) on a quick timeline. For those people, the branded in-house superduperideals seem to be the best bet. many consumers are urged to look in person but either 1) feel awkward walking into a jewelry store 2) don't have time/don't want to make time or 3) even after they walk into a jewelry store are confused so end up going with a 'safe' choice. I wish there were places to see unbiased comparisons of color and cut nuances but I am not sure what these places would be?

Paul thanks for starting this discussion.

 

[yssie]

I certainly don't question the premiums for added value perks, I think that is an excellent reason to choose a branded stone. As is buying for the hearts and arrows, if that is important because it's 'mind-clean' or that person can in fact appreciate the difference and is willing to pay extra for it. I question anyone blindly buying anything without seeing it (or the effects of it, anyway) in-person first, be it colour, clarity, carat, cut, or optical symmetry. We see enough examples on RT of new buyers who have presumptions about all those things, and are sent on one railroad track or another depending on the responder's priorities...we all try to stay unbiased, but I don't think that's a humanly possible standard to consistently achieve.

I do find the premiums on some branded stones shocking, yes, and it absolutely irks me that people are often encouraged to pay these premiums without knowing if they're actually getting a stone their eyes would prefer above others. Personal preference should come above all else, above anyone's standard of good/better/best, be that GIA's, AGS's, or PS's.

PS is an incredible resource of knowledge into this industry, and it is indeed a privilege to be privy to some of that knowledge. But, in the end, dispersion is dispersion, refraction is refraction, and there is nothing about a diamond that is magical beyond what my eyes tell me they can see, so I will trust my eyes over branding, marketing, or lack thereof.

yssie I'm afraid this is just how people operate? people are always willing to pay more for something that is perceived as 'better' by virtue of a fancy label, or just by virtue of being more expensive.

as far as researching purchases...I think many people who come on RT are 1) not all that interested in how diamonds reflect light and 2) on a quick timeline. For those people, the branded in-house superduperideals seem to be the best bet. many consumers are urged to look in person but either 1) feel awkward walking into a jewelry store 2) don't have time/don't want to make time or 3) even after they walk into a jewelry store are confused so end up going with a 'safe' choice. I wish there were places to see unbiased comparisons of color and cut nuances but I am not sure what these places would be?

Paul thanks for starting this discussion.

Precisely - and those "safe" choices cost significantly more, and often mean giving up something else that they might find more visible - a colour or clarity grade, say (I edited my post to make that more clear). But.. neither am I.. unless one is willing to tour jewellery stores, I suppose. Would certainly make for an interesting exhibit, though as you suggest perhaps not popular

Edited!

 

[slg47]

Precisely - and those "safe" choices cost significantly more, and often mean giving up something else that they might find more visible - a colour or clarity grade, say (I edited my post to make that more clear). But.. neither am I.. unless one is willing to tour jewellery stores, I suppose. Would certainly make for an interesting exhibit, though as you suggest perhaps not popular

well I for one would welcome an exhibit that demonstrated differences in
color
carat
clarity
cut (steep deep, 60/60, near tolk type, longer LGFs, shorter LGFs, and more...and that's just for rounds...then we could go with different crown heights for step cuts...different numbers of chevrons for princesses...etc etc etc...)
and of course in sunlight, office light, candle light...
would be a most educational experience!

but back to the practical point, not popular

 

[kenny]

This’ll be a cool article Paul. I look forward to seeing it.

There is a strange but very definite relationship between consumer demand and grading. The labs, in this case GIA and AGSL, are trying to define the ‘best’ for the benefit of consumers. The dealers quite reasonably charge a premium for that, suppliers are interested in supplying things that can command this premium, and consumer taste is shaped to desire it. It’s not just about diamonds. This is the process used for manufacturing consumer taste in nearly everything and we see it in cars, food, clothing etc.

This is no less obvious than the clarity grading scale we’re all familiar with and which has been in place for 80 years. In the standard GIA system there are 11 grades. For most people, the top 5 (F, IF, VVS1, VVS2 and VS1) are completely indistinguishable from one another, even with the aid of a microscope unless you tell them exactly what to look for and maybe not even then. Nonetheless, this consistently accounts for a whopping doubling of the price. Enough people are willing to pay it that the sellers of IF’s aren’t inclined to drop the prices to get a sale so it seems to be working. At the same time, we get TONS of questions here trying to subdivide the SI grades over what is eye visible, an attribute that never has been part of clarity grading. If our scale had a few more steps down in the SI1-I1 range and fewer at the top, would consumer demand have developed differently? Would there be different things that result in a premium or a discount? I suggest that it would, and that this would better reflect what people really seem to be concerned about. One reason that very high clarity has such a price differential is that major ethnic groups that have been both involved in the diamond business and are big customer bases is this: they always refer to clarity by the word PURITY. This is an almost is or actually is a religious reference.

There are other attributes, like transparency or 'crystal' that are generally ignored completely and that have no generally agreed upon scale at all. IF there existed such a scale, it's certain that the higher ranking stones would trade at a premium, even though those same stones don't now and it DOES affect the beauty of the stone.

Hi Neil,
Being your usualy thought provoking.
I agree and add that without adequate and simple grading systems pricing and demand usually do not reflect differences when they are hard to compare.
For instance color in large +5ct stones is easily seen and seems to be properly priced by the market. High level Cut is still hard to communicate, but cut pricing has improved since I wrote this page a decade ago: http://diamond-cut.com.au/26_market.htm

I'm confused.
The part of Neil's post [in the screen capture below] that is in blue text (about high clarity and perception of purity in that culture) is no longer in Neil's original post.
Are they Neil's words, (which Neil edited out but were caught by Garry's quote), or are they Garry's words?

Sometimes writers inject their own responses right in the quote of the other person and use color to identify their own words.

I'm not trying to be a Net Grammar Nannie, or say, "Don't do that.".
I just don't know who wrote the words in blue.

 

[Rockdiamond]

Great discussion Paul- your position as a cutter makes your perspective so valuable in this sort of intercourse.
Of course as a buyer, I have some differing ideas.
I want to touch upon a few to hear reactions.
First

Here on PS, we often describe such stones as the result of ‘gaming the system’. We can probably argue whether that ‘gaming’ takes place with intent, but the fact is that it is sufficient for many cutters to produce the minimum-level of the GIA EX-grade. Considering this result; a majority of diamonds produced near the minimum-level of the grade, it can be questioned whether the resulting production is in line with GIA's original intent of creating a clearly discernable Excellent grade.

This is a crucial point.
Are you speaking with inside knowledge Paul? I ask because it seems to me that GIA's grade was made to encompass a wider variety of really well cut stones given the narrow context of the only preceding cut grade of import- the first AGSL "0".
IN other words, maybe the idea is NOT to have a "clearly discernible" EX cut grade- so as to please a wider set of tastes.
I've heard the case that AGSL widening of the "0" cut grade had nothing to do with GIA's "EX" and I have no reason to doubt that, but can we draw any conclusion that the status quo now has both AGSL and GIA with wider top cut grades than the original AGS top grade?

Of course I do draw the conclusion that AGSL amended their top cut grade to encompass a wider cross section of taste. Including mine, as I never felt that the original smaller table of the AGSL grade was as nice as the larger tabled stones I learned to love during my training at Winston in the '70's

I know the concept of "performance" is accepted widely here on PS- however that is another measuring stick I take exception to.
Yssie really encapsulated my objecitons here

The second question is much less transparent, and I simply can't forsee any universally recognised and accepted resolution, because of the very nature of the issue: What do our eyes see the diamond doing with the light that goes into it, and what do our eyes prefer? If anyone's going to get closer to nailing this one, I think I'll put my lot in with the biologist, neurologist, and electrical engineer team! The first 'level of disagreement', if you will, is that everyone sees things differently. The second level is that everyone interprets what they see differently, and the third is that everyone prefers to see different things. I don't like skinny arrows. And I vastly prefer colour to white light return. And I like strong blue fluor. There's nothing wrong with stones of these types, and many people do prefer them, I'm just not one of them.. Show me a cut grading system that rewards long lower girdle facets and I'll be the one choosing a "poorly" cut stone.. because I've looked at - well, at least hundreds of stones, I've ogled them, admired them, and in the process I've discovered which nuances I prefer to see, and which I don't, so I can make educateded choice about my personal preferences. Which may not be anyone else's.

Sorry- I'm short on time so I can not go into greater detail but it's a great conversation.

 

[Lightfoot]

Paul - I found your post thought-provoking, informative and a welcome point of discussion.

My sentiments after reading it were very similar to natascha's. From what I have seen on PriceScope, Good Old Gold's videos, and from my recent searching for a diamond for an engagement ring, there does seem to be a fair amount of variation in stones that produce excellent optics.

Taking for example a branded H&A cut of any PriceScope vendor,my guess is the variation in cut quality even within the brand is a result of a balance between idealism vs. business viability/practicality. I am not familiar with the specific difficulties of cutting diamonds to extreme levels of precision, symmetry, and consistency, but I imagine it's quite difficult. If, for example, a vendor had 10 stones, all branded, none mirror images of the other, some more precisely cut than others, yet all received excellent AGS or GIA grades and no layperson would be able to perceive a difference optically, has the vendor done anything wrong or gamed anyone? My personal opinion is no I suppose, but at the same time, a forum such as PS has made me more critical of such variation, even if there is an extremely high likelihood that I would not be able to perceive any difference at all.

Regarding PS, others have expressed similar views regarding the perceived "PriceScope preferences" for color and clarity, but my personal opinion here is also that there is nothing wrong with that. I took in the PriceScope preferences as a sort of "collective wisdom" and have found them to be a useful guide in my own balance of beauty vs. price, as I have begun my search in earnest. Without them, I likely would be pricing out a 0.7 ct D IF engagement ring instead of a ~1.5 F/G/H/I VS1 ring.

Do you raise your points out of concern for the consumer, a desire to stay on top of complacency in the diamond cutting world, both, or perhaps something else? I think you raised excellent points, especially the insightful view that PS itself is a grading system. But, I suppose I am uncertain what specific faults or wrongs you are finding (or perhaps I am simply misunderstanding).

 

[Lightfoot]

Precisely - and those "safe" choices cost significantly more, and often mean giving up something else that they might find more visible - a colour or clarity grade, say (I edited my post to make that more clear). But.. neither am I.. unless one is willing to tour jewellery stores, I suppose. Would certainly make for an interesting exhibit, though as you suggest perhaps not popular

well I for one would welcome an exhibit that demonstrated differences in
color
carat
clarity
cut (steep deep, 60/60, near tolk type, longer LGFs, shorter LGFs, and more...and that's just for rounds...then we could go with different crown heights for step cuts...different numbers of chevrons for princesses...etc etc etc...)
and of course in sunlight, office light, candle light...
would be a most educational experience!

but back to the practical point, not popular

Related to this post and this general topic, I would like to say, after having spent this past weekend viewing TONS of Good Old Gold videos, that Jon (aka Rhino) has done a great service, in my opinion, at truly educating consumers regarding how the specs on paper translate to real-world beauty/optics/performance. For those people who have the time and are willing, they provide a great opportunity to make informed decisions beyond marketing and buzz words. (Thank you Jon!)

 

[yssie]

Related to this post and this general topic, I would like to say, after having spent this past weekend viewing TONS of Good Old Gold videos, that Jon (aka Rhino) has done a great service, in my opinion at truly educating consumers regarding how the specs on paper translate to real-world beauty/optics/performance. For those people who have the time and are willing, they provide a great opportunity to make informed decisions beyond market and buzz words. (Thank you Jon!)

I've never worked w/ GOG but I agree their many videos are fantastically helpful! I can also appreciate that it takes courage to publicly opine on and compare their own goods, and promote those comparisons on this forum, all to keep customers as informed as possible - that's really a pretty cool business model, and I hope it serves them well

 

[denverappraiser]

This’ll be a cool article Paul. I look forward to seeing it.

There is a strange but very definite relationship between consumer demand and grading. The labs, in this case GIA and AGSL, are trying to define the ‘best’ for the benefit of consumers. The dealers quite reasonably charge a premium for that, suppliers are interested in supplying things that can command this premium, and consumer taste is shaped to desire it. It’s not just about diamonds. This is the process used for manufacturing consumer taste in nearly everything and we see it in cars, food, clothing etc.

This is no less obvious than the clarity grading scale we’re all familiar with and which has been in place for 80 years. In the standard GIA system there are 11 grades. For most people, the top 5 (F, IF, VVS1, VVS2 and VS1) are completely indistinguishable from one another, even with the aid of a microscope unless you tell them exactly what to look for and maybe not even then. Nonetheless, this consistently accounts for a whopping doubling of the price. Enough people are willing to pay it that the sellers of IF’s aren’t inclined to drop the prices to get a sale so it seems to be working. At the same time, we get TONS of questions here trying to subdivide the SI grades over what is eye visible, an attribute that never has been part of clarity grading. If our scale had a few more steps down in the SI1-I1 range and fewer at the top, would consumer demand have developed differently? Would there be different things that result in a premium or a discount? I suggest that it would, and that this would better reflect what people really seem to be concerned about. One reason that very high clarity has such a price differential is that major ethnic groups that have been both involved in the diamond business and are big customer bases is this: they always refer to clarity by the word PURITY. This is an almost is or actually is a religious reference.

There are other attributes, like transparency or 'crystal' that are generally ignored completely and that have no generally agreed upon scale at all. IF there existed such a scale, it's certain that the higher ranking stones would trade at a premium, even though those same stones don't now and it DOES affect the beauty of the stone.

Hi Neil,
Being your usualy thought provoking.
I agree and add that without adequate and simple grading systems pricing and demand usually do not reflect differences when they are hard to compare.
For instance color in large +5ct stones is easily seen and seems to be properly priced by the market. High level Cut is still hard to communicate, but cut pricing has improved since I wrote this page a decade ago: http://diamond-cut.com.au/26_market.htm

I'm confused.
The part of Neil's post [in the screen capture below] that is in blue text (about high clarity and perception of purity in that culture) is no longer in Neil's original post.
Are they Neil's words, (which Neil edited out but were caught by Garry's quote), or are they Garry's words?

Sometimes writers inject their own responses right in the quote of the other person and use color to identify their own words.

I'm not trying to be a Net Grammar Nannie, or say, "Don't do that.".
I just don't know who wrote the words in blue.

Kenny,
Those are Garrys words in blue. My edit was to add the paragraph at the end about transparency not being an attribute that's traditionally graded and that consequently doesn't affect the price (or demand).

 

[Paul-Antwerp]

Interesting Paul.

Sergey has been saying for a very long time that the AGS usage of the term "Ideal" leads infact to the concept that having achieved that status, there is or can be nothing better.

I am sure that we will see better performance in all or some factors in diamond cuts in the future. And I hope and believe that this will be measurable or quantifyable with scientific and transparent methodology.

PS I think your discussion on AGS fire and scintillation is a bit harsh - the proportions that produce AGS best brilliance are never without some measure of fire and scintillation. However it is true that AGS science seems wanting in those areas. For example I have been working on a cut that probably would fail on 2 measures but more than make up on another - the AGS penalty system will say this is a bad cut because they have no open ended-ness - the idealist failing.

Garry,

I think that you are interpreting my post as criticism of systems, quid non.

Actually, I am trying to describe how systems, designed by people with the best intentions or the result of various people voicing 'free' opinions, have a consequence in the sense that other people will use these systems, also with the best intentions, to their advantage.

In a negative way, this process has been regularly described here as 'gaming the system', especially in examples of 'gaming' the GIA or AGS cut-grade.

My point is not to criticize the designer of such system, nor the people using the systems to their advantage ('gaming' them). It is merely a description of human behaviour.

As you know, knowledge is the start of wisdom. Knowledge however needs awareness first. My post attempts to make people aware that 'systems' have a consequence in the sense that they are and will be 'gamed'.

Live long,

 

[denverappraiser]

One reason that very high clarity has such a price differential is that major ethnic groups that have been both involved in the diamond business and are big customer bases is this: they always refer to clarity by the word PURITY. This is an almost is or actually is a religious reference.

Garry,

I'm not so sure about the ethnic component but it's certainly true that some people are interested in buying the 'best', however that's defined, and they're willing to pay the price to get it.

There are plenty of folks like the makers of lenses or lasers who would consider our definition of 'flawless' to be laughably broad. At the same time, nearly everyone who wants a 'flawless' diamond for symbolic reasons would be perfectly happy with what we call a VVS2 if those stones were to be included into the top grade. The scale is driving the demand, and the vast majority of people aren't sensitive to the difference between the most flawless flawless vs. a borderline VVS1. If there were another category added at the top, say uber-flawless, there WOULD be a demand for it and this would be reflected in the asking prices.