Diamonds are popular for jewelry such as , and necklaces, but many people are unaware of the factors that contribute to the wide price range that diamonds fall into. The price of a diamond is derived from an evaluation of its color, cut, clarity and carat weight. The less color that is visible in a diamond, the more valuable it is deemed to be. Some people perceive diamonds to be colorless, however many diamonds appear to have a normal brownish or yellow tint. A diamond's cut, which is a significant factor in a diamond's brilliance, is related not just to the shape of the diamond, but its polish and proportions as well as symmetry. Clarity is a relative measure of a diamond's blemishes and internal characteristics (inclusions), where a diamond with less irregularities and inclusions will exhibit more brilliance, thus affecting a higher purchase price. Carat weight refers to the actual weight of a diamond, measured in carats, which is abbreviated 'ct.' While each of the above factors contributes to the determined value of a diamond, here we examine what is meant by the fourth factor in determining a diamond's value, carat weight.

The carat weight is simply how much a diamond weighs, but it must be measured in an industry specific way. A carat is a metric measurement that is equivalent to slightly more than seven thousandths (0.007) of one ounce. Diamond weights are measured with the accuracy of a thousandth of a carat but are given a weight that is rounded to the nearest hundredth. Diamonds weighing over one carat are designated as a decimal number up to the hundredths, such as '1.23 carats.' Such a weight would be expressed as 'one carat and twenty three points.' A diamond weighing less than one carat is also represented as a decimal, such as 0.72, in which case it would be said to weigh 'seventy two points.'

Though a diamond's value is determined by its weight in carats, a two carat diamond would cost more than two times the amount that an equivalent one carat diamond would cost. Diamonds with adequate quality to be used in jewelry are rare finds, with larger diamonds being even less commonly discovered than smaller ones. As economics demonstrates, the more limited the supply a valuable product, the higher cost it will claim. As such, there is no defined measurable rate representing a diamond's cost per carat. Rather, larger diamonds fetch an exponentially higher price per carat than the more common smaller ones.