Diamond prices are complicated. Their value is determined by dozens of factors: diamond prices fluctuate from day to day because of market trends, time of year and more, similar to gold or antiques.
Diamond carat weight is the jewelry industry’s measurement of how much a diamond weighs; 1 carat equals 200 milligrams. Yet depending on diamond shape, weight distribution and cut quality, two diamonds with the same carat weight can have much different prices.
What Is Price Per Carat?
The diamond industry uses a matrix called the Rapaport Price List to estimate a loose diamond’s value. The Rapaport List assigns diamond values based on carat weight, color, and clarity grades, as well as fluctuations in the market. The Rapaport List’s diamond values are described in terms of “price per carat.”
“Price per carat” is an individual diamond’s cost divided by its weight.
Price Per Carat = Diamond Price / Carat Weight
Diamond retailers use Rapaport’s “price per carat” values to estimate competitive market prices for their inventory, although final retail prices may be below or above the Rapaport price estimates.
Diamond prices per carat increase as you jump up to higher weight categories. The larger the diamond, the more rare it is. As carat weight increases, you pay more in total and on a price-per-carat basis. Basically, diamond prices increase exponentially as carat weight increases.
Why Is Diamond Price Per Carat Important?
Let’s begin this discussion with a familiar concept: Groceries. Let’s say, for example, bananas are .99c per pound at your grocery store. If you buy a pound of bananas, it costs .99c. If you buy 2 pounds, it costs $1.98. If you buy 3 pounds, it costs $2.97. And so on. Price and quantity have a 1:1 relationship.
Diamonds don’t work that way. With diamonds, size itself is considered an intrinsic element of value, so the price does not have a 1:1 ratio to size (or volume) like bananas. Instead, size acts like a multiplier on the price of a diamond.
The below chart illustrates this concept. As you can see, price per carat increases with weight, causing the total cost of a diamond to increase exponentially the larger it is.
Why Does Price Per Carat Change?
Size and rarity. In general, the larger the diamond, the more rare it is. There are a lot more pieces of diamond rough that can be cut into marketable 1 carat diamonds than there are pieces you can cut into marketable 2 carat diamonds. So, larger diamonds have a higher price per carat weight to reflect that they’re more rare.
Quality factors. Every diamond is unique, and as you may know from our Education section, qualities including the 4 C’s affect a diamond’s price. So, 2 diamonds of the same carat weight are often priced differently (have a different price per carat) because one is higher quality than the other (more sparkly, less inclusions, more symmetrical, etc).
Buying Tip: Shave Off A Few Milligrams
For the best value, consider diamonds slightly below the major carat weight categories. Diamond prices spike at “carat weight cutoffs” (1.00, 1.25, 1.50, etc), so you can save money going slightly under (0.95 vs 1.00). The difference in visual size will be negligible, but the savings can be significant. To prove this hypothesis, we compared two diamonds with the same grades (Cut: Ideal, Color: G, Clarity: VVS1) at 1.00 Carat and .90 Carat to see their price differences:
|1.00 Carat Round Diamond||$6,718|
|0.90 Carat Round Diamond||$5,133|
Buying Tip: The Halo Loophole
A known trick in the diamond business is adding a halo around a smaller center stone to save money. By adding a halo, you can achieve a greater total carat weight, the appearance of a larger stone, and you will spend less money on the diamonds. A smaller center stone, for example a 0.75ct round brilliant diamond, has a lower price per carat, which also means you may be able to get a higher quality stone with significant cost savings. To prove this theory, we compared two diamonds with the same grades (Cut: Very Good, Color: K, Clarity: VS2, Polish: EX, Symmetry: VG, Fluorescence: N) at 1.00 Carat and .75 Carat. We put each diamond in similar settings so that each ring ends up with the same total carat weight.
Diamond A | Setting A
Diamond B | Setting B
|Diamond Weight||1.0 carats||0.75 carats|
|Setting Carat Weight||0.20 carats||0.45 carats|
|Total Carat Weight||1.20 carats||1.20 carats|
|Total Price Per Carat||$4053.30||$2554.20|
As you can see, the price per carat drops almost in half with the 0.75 carat round diamond engagement ring, even though each ring has the same total carat weight. The difference in center stone size is small, but the cost savings are large.
More Diamond Price Resources
- What Is The Average Carat Weight Of An Engagement Ring
- Average Diamond Prices Q&A
- How Much Americans Really Spend On Diamond
- How Much Does A 1 Carat Diamond Cost?
- How Much Does A 2 Carat Diamond Cost?
- A Dude’s Guide To Engagement Ring Shopping
If you were looking for a simple mathematical formula to calculate diamond prices, there isn’t one. The truth is, diamond prices in different carat weights range so much that diamond sellers can’t just slap one price tag on all of them.
Ritani diamonds are hand cut in the heart of Manhattan’s Diamond District, in the largest diamond factory in the U.S, by our experienced and passionate diamond artisans. If you want to figure out how much you should spend on a diamond or just need help understanding more about diamonds, we recommend that you speak to one of our virtual gemologists.
When you’re ready to shop for an engagement ring for the girl of your dreams, shop the way you want to shop at Ritani. We’re here to help you get the moment right.