IGI vs GIA studies

[TODiamonds]

Generally around these parts I often read about how one should only trust GIA and AGS. I totally get it and if someone has the money, then they should definitely improve their odds of getting what they pay for by going with a top grader. However, from what I've seen, there can be fantastic IGI diamonds for much better value than GIA if you're willing to do the leg work. I think IGI is often unfairly completely dismissed on this forum (and the greater North American community at large).

In my research (before buying my IGI diamond), I came across a few interesting studies on IGI vs GIA. Rather than just take the commonly acknowledged view that IGI sucks, I wanted to find objective information. I could only find two studies but they seemed to support the idea that IGI diamond grading is reasonably consistent with GIA standards. I am sure these studies are not news to those of you experts on the forum

https://www.diamonds.net/News/NewsItem.aspx?ArticleID=43417
https://www.diamondscreener.com/edu...ification-labs-gia-vs-igi-grading-and-prices/

The first of these (and the more objective one in terms of methodology) was done by Rapaport in 2013. They sent 10 diamonds of varying sizes and specs to 5 grading labs. Completely anonymously. The results showed the IGI graded the diamonds practically identically to GIA, and both of those were statistically meaningfully more consistent and disciplined in their grading than the 3 labs (AGS was not part of the study). It would be interesting to know which IGI lab they sent the diamonds to, but that is not disclosed unfortunately.

The second study was performed by Diamond Screener (date unknown). They did a retroactive study by combing through James Allen and Blue Nile databases and finding diamonds that were dual-graded by IGI and GIA (n=37). While they work with a larger sample size than Rapaport, this one was less objective because I think all the diamondsThe results support the Rapaport study. In fact, they found they actually found that IGI was generally stricter on color than GIA. They were on par on clarity.

Both studies show IGI diamonds trading between 12-20% less than GIA diamonds despite the data. The results also support what several of the local experts here (Garry H, John Pollard among others) have been suggesting for a long time about IGI being reputable and sometimes even preferred in parts of Asia and Europe.

Anyway I don't particularly have a purpose for this, just thought it was interesting to share - because I think the masses on this forum generally advise newbies to completely throw out IGI diamonds as if they're trash when in reality they can represent good value for those of us who are on a tighter budget (ie: almost all of us) and can't afford brand name super-ideals (which is what almost always gets pushed onto folks who come here looking for advicec).

 

[Karl_K]

Which IGI?
IGI US produces valuation reports that in my opinion are fraudulent.
There is also reported large differences between the other IGI labs with some being better than others.

 

[TODiamonds]

Great point Karl.

As I mention above, unfortunately we don't know which IGI lab Rapaport sent their diamonds to. I would expect it would be one of the reputable overseas labs given how consistent the results were compared to GIA.

 

[oldminer]

To me, the bigger issue is the ability of IGI to be just as demanding and accurate as GIA. The evidence proves they can be just as accurate. The trade, experts in diamonds who put their money into them in order to make a profit, know the financial reality of IGI versus GIA graded diamonds. It is a free market with market forces coming from many different areas. In the end, the effect is that diamonds graded by IGI have a lower per carat value than equivalently graded GIA diamonds. If we don't clearly understand all the reasons, we definitely understand the asking prices are set by a myriad of free market and competitive forces. No doubt, the occasional IGI diamond is a better value than some GIA diamond, but most of the time there are reasons why there is a price differential. It may arise from a market force you comprehend or it may be a market force you never considered. It may even be a combination of several known and unknown forces.

IGI is neither better or worse than GIA. It has a different name and reputation yet is highly respected especially outside the USA. At least in the USA one should expect to be asked a somewhat lower price with an IGI report. Will the diamond be a better value, or simply be priced according to what it is? No one can really make a general statement that would be true in every case. There would be many exceptions to any general rules.

 

[TODiamonds]

Several on this forum have suggested that perhaps IGI gets the shaft in the US because of their "Mall Valuations" which follows them around like a bad smell, but I find it hard to believe it boils down to something as simple as that. Cutters, buyers, graders, there's far too much knowledge out there for market forces to be dictated by something like that.

I've heard others in the trade suggest that GIA has so much resources and marketing clout that they've established an insurmountable lead. That at this point, given their market share, that it will be impossible for anyone to match them, regardless of the quality or consistency of their grading - in other words it's not about the grading anymore, the industry is set up in such a way that GIA is too big to fail. If you wanna sell your Diamond for top dollar in the US, you don't have a choice. Alternatively, if you're a GIA competitor in the US the same applies - how can you possibly afford to be more demanding than GIA if they already have all the leverage and the chips? You'll simply go out of business - or be relegated to a very small niche of the market (like AGS). It's not dissimilar to the Microsoft Antitrust issue when you think about it.

 

[oldminer]

TODiamonds, you are making some good points on the somewhat hidden reasons behind the scenes which may have an adverse effect on credibility and/or value. I have often said that no lab can offer grading more harsh than what is conceived to be GIA grading in the USA and hope to survive long or grow their market share. Labs which seek to compete with GIA get a share of the crumbs which fall off GIA's dinner plate. They may not starve, but they can't eat all they'd like, either. They can fall prey to strong arm tactics by their best and largest customers. It is difficult to say "no" when a powerful client insists. And, they do sometimes "insist".

 

[Athena10X]

Considering that the MMD market is growing in the US and most MMD are certified by IGI and GCAL, with little to no presence of GIA (or even AGS), couldn’t consumer exposure and confidence in these other grading agencies expand into the mined stones (especially if we’re eventually expecting 90% of the diamonds to be MMD in the future)? Or will consumers take the approach that one grading agency is “better” for MMD and the other for mined (though I doubt this)? And although we’re currently seeing a “discount” on mined stones graded by IGI, would the prices of mined IGI stones in the future rise to match GIA, or would the price of GIA stones decrease to align with IGI (keeping in mind that mined will still hold a premium to MMD)? If so, would buying IGI graded mined today be an “investment” and conversely could owning a GIA become a future “loss” (not that I consider diamonds investments)?

 

[Karl_K]

Considering that the MMD market is growing in the US and most MMD are certified by IGI and GCAL, with little to no presence of GIA (or even AGS), couldn’t consumer exposure and confidence in these other grading agencies expand into the mined stones (especially if we’re eventually expecting 90% of the diamonds to be MMD in the future)? Or will consumers take the approach that one grading agency is “better” for MMD and the other for mined (though I doubt this)? And although we’re currently seeing a “discount” on mined stones graded by IGI, would the prices of mined IGI stones in the future rise to match GIA, or would the price of GIA stones decrease to align with IGI (keeping in mind that mined will still hold a premium to MMD)? If so, would buying IGI graded mined today be an “investment” and conversely could owning a GIA become a future “loss” (not that I consider diamonds investments)?

It is not something I would take into consideration as a value proposition but who knows IGI's reputation may rise in the US but as long as IGI US is releasing bad toilet paper(imo) I don't think it will rise that high.

 

[Karl_K]

Several on this forum have suggested that perhaps IGI gets the shaft in the US because of their "Mall Valuations" which follows them around like a bad smell, but I find it hard to believe it boils down to something as simple as that. Cutters, buyers, graders, there's far too much knowledge out there for market forces to be dictated by something like that.

I've heard others in the trade suggest that GIA has so much resources and marketing clout that they've established an insurmountable lead. That at this point, given their market share, that it will be impossible for anyone to match them, regardless of the quality or consistency of their grading - in other words it's not about the grading anymore, the industry is set up in such a way that GIA is too big to fail. If you wanna sell your Diamond for top dollar in the US, you don't have a choice. Alternatively, if you're a GIA competitor in the US the same applies - how can you possibly afford to be more demanding than GIA if they already have all the leverage and the chips? You'll simply go out of business - or be relegated to a very small niche of the market (like AGS). It's not dissimilar to the Microsoft Antitrust issue when you think about it.

Having a monopoly or near one is not in itself illegal, doing bad things to keep it is what brings the feds down on a company.

Education is a major reason GIA is so big in the US. 99.99%+ of the trade in the US and a large chunk outside who have formal training where trained by GIA.
Braking the lab from the training division might be a reason for anti-trust attention but there has to be grounds to do so.

 

[Athena10X]

It is not something I would take into consideration as a value proposition but who knows IGI's reputation may rise in the US but as long as IGI US is releasing bad toilet paper(imo) I don't think it will rise that high.

Does your valuation also apply to IGI Antwerp or India?

 

[Karl_K]

Does your valuation also apply to IGI Antwerp or India?

As far as I know they are not doing the valuation reports that is just IGI US from what I have been told.
The rest of IGI I have heard from professionals with a lot of experience the consistency from lab to lab is not that great.
Within the same lab the reputation is higher for some of them.
Which is the problem, I can tell a novice to look for GIA/AGS reports and its simple and easy.
Telling someone to look for reports from this IGI lab and not another is complicated and error prone.

Consistency is just as or even more important than accuracy.
With GIA/AGS there is a reasonable but not absolute probability that the grading is accurate one report/stone to another.
The probability is high enough that I can recommend them.

Telling someone to look for IGI when the grading can range from awful to pretty good depending is not a good idea.
There is little consistency, so its not going to happen.

 

[TODiamonds]

Just randomly came across this dual-graded diamond on a reddit thread. I was giving input on the stone and noticed at the very end it was laser inscribed by both GIA and IGI. These instances are so rare I just had to look it up out of curiosity.

GIA: https://www.gia.edu/report-check?reportno=2203238113&s=1568176892962
Date: Apr 23, 2019
Clarity: SI2
Color: F
Cut/Polish/Symmetry: XXX

IGI: https://www.igi.org/verify.php?r=33230357
Date: Mar 13, 2008 (over 10 years ago!)
Clarity: SI2
Color: G
Cut/Polish/Symmetry: XXVG

Owner resubmits to GIA and gets a color AND symmetry upgrade... best couple hundred ever spent