Briefs

A diamond is forever -- but at what price?
Monday, 13 February 2006

With just a few shopping days until Valentine�s Day, news of a way to determine market value of a diamond comes at the perfect time.

It all started when Anderson Analytics Managing Partner and Founder, Tom Anderson, was looking for a means to compare different diamonds to each other, as well as different diamond retailers to each other, to see which diamonds were a better value for the price.

�I thought that diamond retailers must have a formula for valuating diamonds and setting the correct selling and buying price based on what they call the 4 C�s (cut, color, clarity and carat),� said Anderson. �But diamond merchants never reveal their methods for determining value, and to my surprise there was no such formula anywhere on the Internet.�

So Tom turned to Anderson Analytics to do what it does best -- take large amounts of data, such as general diamond pricing and 4 �C� information for thousands of diamonds, and analyze it. Using advanced statistical software Anderson Analytics literally �mined� all the data available on over 44,000 diamonds! The result of the multivariate analysis was a methodology for predicting the price and market value of diamonds with a very high degree of certainty.

�Since we are in the knowledge business at Anderson, I found it ironic that I just couldn�t get enough information on diamond market value. We think the methodology we developed for determining diamond value is an important exercise in illustrating how advanced analytic techniques can help make not just business decisions, but common decisions as well, much more manageable,� said Anderson.

Here is the rest of the story.