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How are Diamond prices calculated?

Unlike other products where we add up all the costs and add a certain amount of profit to determine the price of the product, diamond pricing is a bit complicated thing. Before seeing the factors that affect the price of diamond, let us see the formula for calculating the price of diamonds.

Total Diamond Price = Price per Carat x Carat Weight

The formula looks pretty simple until we have a glance at the factors that affect the pricing of diamond

  1. Carat – the weight of the diamond:

If you have a look at the diamonds that are identical in terms of color, clarity, and cut but that differ in weight, you’ll find that bigger stones are more expensive.

  1. Color – the degree of colorlessness (absence of a yellowish tint) of the diamond:

The more colorless a diamond, the more expensive it is. Colorlessness refers to the absence of yellowish or other tints in the stone.

 

 

 

  1. Cut – the proportions of the stone:

There are various combinations of proportions that have been found to maximize the brilliance and sparkle of a diamond. The closer a stone’s cut is to such proportions, the more expensive the diamond is.

  1. Clarity – the presence (or absence) of visible flaws in the diamond:

Clarity refers to the absence of visible inclusions in the stone. Diamonds that have imperfections that are more visible and numerous are cheaper.

  1. Shape – whether the stone is round, rectangular, oval, etc. :

More popular shapes such as the round cut and the princess cut are more expensive compared to other shapes such as the pear cut or the trilliant cut.

 

Calculate using Rapaport Price List

One thing to note here is that Rap Prices place a heavy emphasis on color and clarity over cut. However, in reality, as long as a diamond’s color and clarity are above a certain grade, and there are no visible yellow tints and flaws, additional improvements on these two dimensions won’t be visible to the naked eye. In such a case, any additional money paid for better clarity and color would be a waste, and you would do better to pay for an excellent cut instead.

The question still remains how do we calculate?

First, you need to find the diamond’s carat group. For example, if the diamond is 2.50 ct, look at the grid labeled “2.00 – 2.99 CT”. Next, find the color grade of the diamond in the leftmost vertical column, and then find the clarity grade in the topmost column. For example, if the diamond is F color and VVS2 clarity, find where the F row intersects with the VVS2 column – this is the stone’s Rap Price. The values are in 100 dollars, so here the value is 280, this makes the price to be $28000.

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