Diamond Ring Prices.xls
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Last edited: Apr 22, 2010
Singfat Chu(1996). Journal of Statistics Education Vol. 4, #3.
The source of the data is a full page advertisement placed in the Straits Times newspaper issue of February 29, 1992, by a Singapore-based retailer of diamond jewelry.
The advertisement contained pictures of diamond rings and listed their prices, diamond content, and gold purity. Only 20K ladies' rings, each mounted with a single diamond stone, were considered for this study. 20K rings are made with gold of 20 carat purity. (Pure gold is rated as 24K.)
There were 48 such rings of varying designs. The weights of the diamond stones ranged from 0.12 to 0.35 carats (a one carat diamond stone weighs 0.2 gram) and were priced between $223 and $1086. The jewelry store adopted a fixed-price policy.
How Is Jewelry Priced?
In Singapore, the pricing of gold jewelry is simple. The price equals the current market value of the gold content (i.e., weight times the going rate per gram of gold) plus a craftsmanship fee.
However, the pricing of other jewelry like diamond rings is more complicated because they are not as standardized as gold jewelry. The price of diamond jewelry depends on the four C's: caratage, cut, colour, and clarity of the diamond stone. A good cut gives a diamond more sparkle. Colourless diamonds are the most prized. A flawless diamond has maximum clarity because the passage of light is unimpeded through the stone. Cut, colour, and clarity are subjective factors and are very hard for the layman to gauge.
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