Why Are Diamonds Worth More Than Water

The world s diamond supply is depleting which is why the price of diamonds is increasing.

Why are diamonds worth more than water.

Not only are diamonds common but we re also paying way more for them than they re worth. Writing for the american water works association marketing strategist and executive melanie goetz addressed this paradox. Longtime jeweler vincent taylor told the guardian profit margins by high end jewelers are so big that the price you pay is a false price although taylor is. The reason why diamonds are more expensive than water generally speaking is because there is a lot more water around than diamonds.

Total and marginal insight into and clarification of the diamond water paradox results by differentiating between total utility and marginal utility. Learn why a diamond is valued more highly than a bucket of water or why a professional athlete is valued more highly than a high school math teacher. Sure diamonds go through a very involved process. The diamond water paradox which presumes the classic concern of why diamonds are more costly than water thinking about that the latter is better than the former in fact is a classic problem typically presented to trainees of economics.

To learn more about the four c s read our post here. The german economist hermann heinrich gossen. The paradox of value also known as the diamond water paradox is the contradiction that although water is on the whole more useful in terms of survival than diamonds diamonds command a higher price in the market the philosopher adam smith is often considered to be the classic presenter of this paradox although it had already appeared as early as plato s euthydemus. Why are diamonds so much more expensive than water.

Economist adam smith famously posed the question why are diamonds more valuable than water he meant to highlight that diamonds for all their cultural significance are functionally useless. A coat is not worth eight times as much as a hat to the community because it takes eight times as long to make it the community is willing to devote eight times as long to the making of a coat because it will be worth eight times as much to it. In total people get more enjoyment from water rather than diamonds. This is the overall satisfaction of wants and needs obtained from consuming a good.

If you live in america all you need to do is turn on the. For example you can have a whopping 10 karat diamond but if it s clarity is low it does not guarantee the huge stone will be worth more than a smaller sized diamond with perfect clarity. Why are diamonds more expensive than water.