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Why Diamonds?


fesco
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There are lots of ornaments which are cheaper than Diamonds but still people do their best to buy diamonds. I know this could be a stupid question for some, but still I need to know. Does expensiveness of the diamond attract people to go for it or is there any other reason? 

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Maximizing bling per dollar is hardly the way diamonds work so I’m not even sure I understand your question.  Why do people buy diamonds?  Because they’re cool.  Because they’ve been conditioned to buy them.  Because it’s culturally necessary (in the case of engagement rings).  Because they’re a ‘safe’ gift.  Other bits of bling you can give may not go over so well.
 

https://jet.com/product/detail/27bb541385834f7b85bd171a207427b8?jcmp=pla:ggl:a_nj_dur_gen_apparel_accessories_a1_b1:apparel_accessories_clothing_outerwear_a1_other:na:PLA_632518940_26547545577_pla-161718818220:na:na:na:2&code=PLA15&gclid=CIj7obe6q9ACFQgCMgodDy4J1g&gclsrc=ds

Edited by denverappraiser
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Diamonds are symbolic of deeper values.  They represent a deep part of the earth and are symbolic of love and trust.  They have been such since well before deBeers and 20th century advertising campaigns.  Their rarity and cost confined them to the upper classes, nobility and royalty.  Until the advent of the industrial revolution there was very little middle class.  As the middle class exploded in the 20th century, suddenly there was a whole new huge population with disposable income.  Advertising was aimed at this new class and suddenly there was a whole new mass market for diamonds.

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Simple supply and demand. There is a scarcity of diamonds and great demand for diamonds that are used to create engagement rings. This is mainly a result of De Beers, who created the ad campaign "A Diamond Is Forever" to promote the use of diamonds in engagement rings and other jewelry, and also controls 80% of the world's supply of diamonds in order to keep the price of diamonds artificially high.

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Question:

There are lots of ornaments which are cheaper than Diamonds but still people do their best to buy diamonds. I know this could be a stupid question for some, but still I need to know. Does expensiveness of the diamond attract people to go for it or is there any other reason? 

 

Not an answer?

Simple supply and demand. There is a scarcity of diamonds and great demand for diamonds that are used to create engagement rings. This is mainly a result of De Beers, who created the ad campaign "A Diamond Is Forever" to promote the use of diamonds in engagement rings and other jewelry, and also controls 80% of the world's supply of diamonds in order to keep the price of diamonds artificially high.

 

Supply and demand explain the price of diamonds - not the preference (i.e. the level of demand itself), which was the question. Apart from that, what you say is factually incorrect in several important respects:

 

a. There are significantly more diamonds produced than other gem types (e.g. Tanzanite production was estimated at around 17 million carats/year in 2005, ruby around 50 million carats/year and emerald around 25 million - against diamond production of well over 120 million carats/year for diamonds 2010-2015, and over 160 million carats/year for the period 2005-2008)*

 

b. Production of diamonds has slowed down partly because some mines are running out, but mostly because there is a glut of inventory and demand is insufficient to clear the amounts produced. This is expected to continue through at least the rest of the 2010s if not in the 2020s** and it is the opposite of scarcity.

 

c. De Beers nowadays controls less than 20% of production and under 40% of global distribution. It went below 80% around 1990 when the Russian mines left the cartel/entered the market (depending on how you want to see it), and it has kept losing share since then***.

 

* Sources: USGS (2013), Bain & Co (2011, 2015)

** Source: Bain & Co (2015)

*** Sources: Bain & Co (2015), Kitco (2013)

Edited by davidelevi
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Simple supply and demand. There is a scarcity of diamonds and great demand for diamonds that are used to create engagement rings. This is mainly a result of De Beers, who created the ad campaign "A Diamond Is Forever" to promote the use of diamonds in engagement rings and other jewelry, and also controls 80% of the world's supply of diamonds in order to keep the price of diamonds artificially high.

This is a slightly dated view point.  As much as I agree the deBeers ad campaigns of the 20th century created a demand that was untapped until then, you can hardly say they control the market at this point.  There are too many producing countries who sell outside of deBeers' purview for them to have the majority hold on the market they once did.

 

edited to add: I should have read to the end of the thread.  Davide, of course, covered this point.

Edited by LaurentGeorge
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