If there's one thing people think they know about diamonds, it's that bigger is better. It follows that bigger would be more expensive, but the relationship between size and price is not as direct as one might think.

What exactly is a carat?

The word carat comes from the carob seed, which was used as a measure in ancient India (where diamonds were discovered) because it was small and consistent in weight. A carat weighs 1/142nd of an ounce. That is, 142 carats = 1 ounce. You could mail a gross of one-carat diamonds (a gross = 144) for about the price of a postage stamp—though we don't recommend that you do this! But from this perspective, a carat isn't much at all.

Diamond weights below a carat are given in points, a carat having 100 points. A "50-point diamond," though it may sound quite impressive, is one what weighs half a carat.

How big is a diamond?

Diamonds come in a range of sizes, from one point right on up. Oddly enough, though, a diamond the weight of a carob seed is most popular these days. One-carat diamonds are so sought after, in fact, that one way for customers to get a bargain is to shop for a diamond that's a point or two under one carat. Since most people want a carat or more, these just-under-a-carat stones are often priced to move. And really, can you tell the difference between 1.00ct. and .98ct?

Extraordinarily large diamonds are rare, and they become increasingly rare as large diamond rough deposits are mined out. The few big diamonds we know about are famous not only for their size and beauty, but for the history that goes along with them.

The Cullinan Diamond, found in South Africa in 1905, weighed in at a pound and a half, a startling 3,106 carats. That was twice the size of the largest diamond found before. The stone was presented as a gift to King Edward VII of England.

Cutting the Cullinan was a major event. Experts took three months just to decide how to cut it, what shapes to give the finished gems in order to maximize yield from the rough. Eventually, the Cullinan yielded 9 major stones, 96 brilliant cut diamonds, and 9.50 carats of unpolished pieces. The total weight of the cut stones was 1,065 carats, representing a 65% loss in cutting. A large loss of material is inevitable in cutting rough material to produce gems of highest beauty. 

The largest stone cut from the Cullinan, a 530.20-carat diamond known as the Star of Africa, was set into the British royal scepter. The other gems from the Cullinan eventually became part of other jewelry belonging to the royal family.

A more contemporary tale is that of the Taylor-Burton Diamond. In 1972, Richard Burton gave Elizabeth Taylor a pear-shaped diamond weighing 69.42 carats. The piece had been purchased at auction in 1969 for $1.05 million, the highest price ever paid for a diamond at that time. Ten years later, following her divorce, Taylor sold the diamond for nearly $5 million.

How big for how much?

With gems, there's size and then there's apparent size. When we look at a diamond set in a ring, we're usually seeing it from the top. Much of its size is not visible. These pictures, comparing well-cut round brilliant diamonds as seen from the top, illustrate how doubling the carat weight does not double a stone’s visible size.

But it's the visible size that customers want to be large. Diamonds may be cut to look big and meet customer demand, but this is always done at the expense of the stone's beauty.

Huge and unique diamonds are priced according to rarity, history, cachet and what someone is willing to pay. Smaller diamonds have a more regularized pricing, though it is complex and dependent on many variables.

Diamonds are not simply so-much-per-carat, the way gold is so-much-per-ounce. That is, a two-carat diamond is not simply twice the price of a one-carat diamond or four times the price of a half-carat diamond.

Large rough stone deposits of diamond are rarer, so larger diamonds cost more per carat. Also, as noted above, better cut proportions mean more weight loss in the cutting, and this is also reflected in the price.

Color

The finest and most expensive diamonds are totally without color, like a drop of distilled water. The rainbow hues a diamond flashes derive from the light it separates into the colors of a spectrum. Diamonds of lesser quality have a yellowish or brownish cast.

Judging color is a job that can be performed only by experts with proper gem lab equipment. To grade color, the gemologist places the diamond under white light that is constant and free of ultraviolet rays. The stone is placed table down (that is, top down) and viewed through the pavilion. It is more difficult to judge color if the stone is already mounted.

The tested diamond is compared to a set of five master stones whose colors have been accurately graded and certified by the Gemological Institute of America.

The GIA color grading scale ranges from D through Z. (A, B and C are not used to avoid confusion with other grading systems that use only those three letters.)

• D - E: The diamonds are colorless.
• F - I: The diamonds are near colorless. Small stones appear colorless when mounted, but large stones appear tinted to the trained eye.
• J - L: Slight traces of color are apparent in mounted stones only to the trained eye.
• M - Z: Mounted stones will display a yellowish tint, even to the untrained eye.

The gemologist assigns the stones a specific letter grade. All other things being equal, the lower the color grade, the lower the stone's value.

"Fancy Colored" Diamonds

Diamonds are found in almost every color. The Hope diamond is blue. Other diamonds are canary yellow, pink, rose, and green.

To avoid confusion, diamonds of intense color are referred to as "fancies."

Diamonds of intense color are rare in nature. Those of exceptional quality are very expensive and considered collector's items.

The majority of "fancy colored" diamonds are not natural in color but are color enhanced by irradiation or other means. These treatments are done to diamonds of poor color that would have low value in their natural state.

Clarity

Clarity is the term used to describe the internal quality of a gem. A trained expert examines the diamond for inclusions, cracks, spots, clouds, or any other blemish or imperfection of any sort. Usually blemishes cannot be seen with the naked eye but can be detected under 10-power magnification.

Clarity Grading Levels

The Gemological Institute of America (GIA) recognizes 10 grading levels for clarity. Other qualities being equal, the lower the clarity grade, the less valuable the stone.

• IF - Internally Flawless
  Free of flaws, cracks, spots, clouds, or any other blemish or imperfection of any sort when examined under proper light by a trained eye with the aid of a diamond eye loupe or other magnifier with a magnification of at least 10 power.
• VVS1- Very, Very Slightly Imperfect (1)
  The gem may have a very tiny pinpoint of included material, cloud, polishing line, or faint knot line, but only one of these blemishes and it is very faint to a trained eye under 10X magnification.
• VVS2 - Very, Very Slightly Imperfect (2)
  Inclusions may be the same as for VVS1, but slightly larger and more numerous. They are still very hard to see.
• VS1 - Very Slightly Imperfect (1)
  The gem may have minute internal cleavage or fracture (feather) near the girdle, or it may have any of the above blemishes, slightly larger but still fairly difficult to detect under 10X magnification.
• VS2 - Very Slightly Imperfect (2)
  Any of the above inclusions are more easily visible under a 10X loupe. An included crystal or other small blemish may be seen through the crown.
• SI1 - Slightly Imperfect (1)
  The diamond has a cleavage fracture or any blemish or combination of blemishes not visible to the unaided eye but easily seen under 10X magnification. A small dark spot in the center of the stone or a larger white flaw toward the edge would be graded SI.
• SI2 - Slightly Imperfect (2)
  The diamond has slightly larger inclusions than grade SI1, but they still are not visible to the naked eye when the stone is face up.
  (NOTE: There is no such thing as a GIA grade of SI3. Such a stone is really just an I1 grade.)
• I1 - Imperfect (1)
  Inclusions are just visible to the eye without a loupe.
• I2 - Imperfect (2)
  Inclusions are easily seen with the unaided eye.
• I3 - Imperfect (3)
  This grade denotes a badly flawed diamond with cleavages, fractures, large clouds, and dark spots large enough to block light passage and destroy brilliancy. This grade of diamond would be inappropriate for jewelry.

Excessive inclusions or fractures not only make the diamond unattractive, but may weaken its strength so it is more likely to crack. However, flawless diamonds are extremely rare in nature. One expert points out that no two diamonds are alike, and that inclusions in a particular stone are like its fingerprint, identifying it among all others.