Diamond Buying and the Four Cs, Part 1: Diamond Carat Weight
Table of Contents
A Brief History of the GIA Diamond Grading System
Before the Gemological Institute of America (GIA) developed the Four Cs system in 1953, diamond grading was quite subjective. For example, the finest diamonds received designations such as “gems of the first water.” Lesser diamonds were known as diamonds of the “second” and “third water.” When using these terms, Arab traders most likely referred to a combination of clarity, brilliance, and colorlessness. The finest diamonds were supposed to be limpid, like water, and brilliant and lively, as if a river moved through the stone.
The first attempts to create more objective standards gave diamonds grades such as A, AA, AAA, and even AAA+. However, there was no consensus on how to classify diamonds into these groups. This state of affairs caused confusing among diamond buying consumers, as retailers used these grades to market their stones rather than describe them accurately.
Robert M. Shipley, the jeweler and educator who founded the GIA, developed the Four Cs system. Indian traders had already used three of the properties — color, clarity and carat — for thousands of years. Shipley went into greater depth for each property and also set the criteria for cut. He even started his diamond color scale with the letter “D,” just to differentiate the GIA’s grading scale from all previous ones. Although “D” doesn’t traditionally have very marketable connotations, Shipley’s classification system became the industry standard. The grade “D” became synonymous with top colorless diamonds.
What is a Carat?
Perhaps the most noticeable quality of a diamond, carat measures its weight. (Don’t confuse carat with karat, which measures gold purity). One carat, abbreviated as “ct,” equals 0.2 or one-fifth of a gram. That means five carats equals one gram.
Price per Carat
Of course, prices go up as diamond carat weight increases. However, prices increase exponentially rather than incrementally. Certain carat values called “magic numbers” mark the points where diamond prices jump: 0.90 cts, 1.00 cts, 1.50 cts, 2.00 cts, 3.00 cts, 4.00 cts, and 5.00 cts. This means that diamonds ranging from 0.01 to 0.90 cts, for example, have around the same price per carat. Once above 0.90 cts, a diamond’s price per carat increases as it enters a new range.
Let’s look at a hypothetical case. Say certain diamonds from the 0.50 to 0.89-ct range sell for $1,000 a carat. Thus, a 0.88-ct diamond would cost $880 and a 0.89-ct diamond would cost $890. At the 0.90-ct marker, however, the price per carat will increase. Let’s say it jumps to $1,200 a carat. That means the 0.90-ct stone would cost $1,080 — much more than the $880 for the 0.89-ct stone, even though the two diamonds look roughly the same size.
Finding a Good Diamond Value per Carat
You’ll find the best diamond deals with carat sizes right below one of those “magic numbers.” For example, 1-ct diamonds are traditional for engagement rings. Due to the popularity of this carat size, 1-ct diamonds cost significantly more than slightly smaller diamonds.
In general, consumers should be cautious when buying diamonds right at the 1.00 carat mark. Gem cutters will sometimes sacrifice cut in order to boost an otherwise 0.98 or 0.99-ct diamond into a higher price per carat range. (Such diamonds may have a heavy make or shape). Furthermore, if a diamond slightly over 1.00 carat chips, re-polishing might make it fall below the 1.00 carat mark. This will cause a dramatic drop in value.
Although fairly rare, diamonds right below the 1.00 carat mark often make the best deals. They appear the same as 1-ct diamonds but cost much less per carat.
Diamond Carat Size and Rarity
The larger the diamond, the more per carat it costs. In other words, the increase for price per carat goes up dramatically for each “magic number.” For example, the difference in price between a 4-ct and a 3-ct diamond greatly exceeds the difference between a 3-ct and a 2-ct diamond. Larger diamonds are much rarer than smaller ones. Thus, the larger the diamond, the more expensive it is.
Here’s a rough estimate of the rarity of gem-quality diamonds by carat size:
- 1-ct diamonds: 1 in 1 million.
- 2-ct diamonds: 1 in 5 million.
- 3-ct diamonds: 1 in 15 million.
How Does Diamond Carat Weight Affect Other Qualities?
Keep in mind that the larger the stone, the more obvious the other three Cs become. A large stone will make any deficiencies in color, inclusions, or cut more obvious. Therefore, buyers of large stones should understand how to evaluate color, clarity, and cut.