I am trying to figure out if there is a "sweet spot" size. For example, as a diamond gets heavier in size, the price/carat is obviously higher. But is this a linear relationship or is there a curve of some sort?

Assuming all other variables held equal, let''s say a 1ct diamond costs $5k/ct. Then a 1.5ct costs $7,500 per carat. And then a 2ct costs $10,000 per carat. Is there a range in size where you can go larger but the $/ct doesn''t rise?

Date: 3/27/2009 3:10:26 PM Author:ddcha
I am trying to figure out if there is a 'sweet spot' size. For example, as a diamond gets heavier in size, the price/carat is obviously higher. But is this a linear relationship or is there a curve of some sort?

Assuming all other variables held equal, let's say a 1ct diamond costs $5k/ct. Then a 1.5ct costs $7,500 per carat. And then a 2ct costs $10,000 per carat. Is there a range in size where you can go larger but the $/ct doesn't rise?

The most common price/weight increase points are every 0.5 carats. Also, 0.7, 0.8 and 0.9 tend to be somewhat above-linear (but not x.7, x.8 and x.9).

In terms of your original question - my sense (supported by logic and observation, but not statistically reliable data) is that the relationship is somewhat steeper than linear, and closer to an exponential for a broad range of sizes. This is because the probability (statistically verified) of finding larger diamonds is exponentially (squared) smaller as size grows, so that the overall price is roughly proportional to rarity. Of course, when you get to exceptional diamonds (say over 50 ct), then the relationship breaks down and each stone is a case apart.

It’s linear with steps up at a few key points like 0.70, 1.0, 1.5 etc. This would suggest that a 0.99 and the like are where the bargains happen but there’s a sticky problem. If you start out looking for a GIA/xxx/h&a type stone, you’ll never find one. The cutters simply don’t manufacture them. It just doesn’t make to do a premium cut on a stone that you’ll have to sell at a discount because of the weight when they can downgrade the cutting a little bit and get over the 1.00 weight. What it boils down to is that your assumption of 'all other variables remain constant' isn't one of your choices.

Date: 3/27/2009 5:21:23 PM Author: denverappraiser
It’s linear with steps up at a few key points like 0.70, 1.0, 1.5 etc. This would suggest that a 0.99 and the like are where the bargains happen but there’s a sticky problem. If you start out looking for a GIA/xxx/h&a type stone, you’ll never find one. The cutters simply don’t manufacture them. It just doesn’t make to do a premium cut on a stone that you’ll have to sell at a discount because of the weight when they can downgrade the cutting a little bit and get over the 1.00 weight. What it boils down to is that your assumption of ''all other variables remain constant'' isn''t one of your choices.

Is it really linear, or is it more exponential Neil?

With the exception of key point weights I always thought that as you get bigger the increase in size gets more expensive as the stones get larger (i.e. the price for a .1 carat increase would be larger when you go from 3.1 - 3.2 carats versus 1.1 - 1.2 carats).

The steps up can be pretty significant and, of course, the trend is upward on a fairly steep path but, for example, the relationship between a 1.03 and a 1.13 is pretty constant in terms of the price per carat with other things being the same where 1.91-2.05 would be importantly different. There are definite categories like 1.00-1.49, 1.50-1.99, 3.00-3.99 etc where this happens.

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