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Is price/carat a linear relationship?

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ddcha

Shiny_Rock
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Mar 25, 2009
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170
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?

I hope I explained this clearly enough...
 

Moh 10

Brilliant_Rock
Joined
Oct 25, 2008
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1,004
There are ranges for price per carat.

You get the most weight per dollar just below a range milestone.

Look for a 0.99 or a 1.49 carat stone.

Perhaps one of our experts can list the exact ranges.
 

oldmancoyote

Brilliant_Rock
Joined
Aug 22, 2008
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755
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?

I hope I explained this clearly enough...
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.
 

denverappraiser

Ideal_Rock
Trade
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Jul 21, 2004
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8,742
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.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 

kcoursolle

Super_Ideal_Rock
Joined
Jan 21, 2006
Messages
10,589
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.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
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).

Thanks in advance for the explanation!
 

denverappraiser

Ideal_Rock
Trade
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Jul 21, 2004
Messages
8,742
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.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
 
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