IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03914263.html
   My bibliography  Save this paper

Understanding diamond pricing using unconditional quantile regressions

Author

Listed:
  • Nicolas Vaillant

    (LEM - Lille - Economie et Management - Université de Lille, Sciences et Technologies - CNRS - Centre National de la Recherche Scientifique)

  • François-Charles Wolff

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

This paper investigates the relationship between the selling price of diamonds and their weight in carats. For this purpose, we use a unique sample of 112,080 certified diamonds collected from www.info-diamond.com during the first week of July 2011. We find substantial differences in pricing depending on cut shape. The price of diamonds increases markedly with the carat weight, with a price elasticity equal to 1.94. However, estimates from unconditional quantile regressions show that the price-weight elasticity is not constant since it rises along the price distribution of diamonds. Finally, we observe the existence of significant increases in prices for diamonds featured with round weights compared to gems just below these threshold weights.

Suggested Citation

  • Nicolas Vaillant & François-Charles Wolff, 2013. "Understanding diamond pricing using unconditional quantile regressions," Post-Print hal-03914263, HAL.
    • Handle: RePEc:hal:journl:hal-03914263
    Note: View the original document on HAL open archive server: https://hal.science/hal-03914263
    as

    Download full text from publisher

    File URL: https://hal.science/hal-03914263/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Javorcik, Beata S. & Narciso, Gaia, 2008. "Differentiated products and evasion of import tariffs," Journal of International Economics, Elsevier, vol. 76(2), pages 208-222, December.
    2. repec:eme:rlec11:s0147-9121(03)22001-x is not listed on IDEAS
    3. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    4. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    5. Frank Scott & Aaron Yelowitz, 2010. "Pricing Anomalies In The Market For Diamonds: Evidence Of Conformist Behavior," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 353-368, April.
    6. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    7. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    8. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    9. David E. Giles, 2011. "Interpreting Dummy Variables in Semi-logarithmic Regression Models: Exact Distributional Results," Econometrics Working Papers 1101, Department of Economics, University of Victoria.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The price of diamonds
      by Economic Logician in Economic Logic on 2013-10-04 20:00:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rita Laura D’Ecclesia & Vera Jotanovic, 2018. "Are diamonds a safe haven?," Review of Managerial Science, Springer, vol. 12(4), pages 937-968, October.
    2. Vera Jotanovic & Rita Laura D’Ecclesia, 2019. "Do Diamond Stocks Shine Brighter than Diamonds?," JRFM, MDPI, vol. 12(2), pages 1-19, May.
    3. François-Charles Wolff, 2016. "Bargaining powers of buyers and sellers on the online diamond market: a double perspective non-parametric analysis," Annals of Operations Research, Springer, vol. 244(2), pages 697-718, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Evangelista, Rui & Silva, João Andrade e & Ramalho, Esmeralda A., 2022. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Energy Economics, Elsevier, vol. 109(C).
    2. Nicodemo, Catia & Raya, Josep Maria, 2012. "Change in the distribution of house prices across Spanish cities," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 739-748.
    3. Rui Evangelista & João Andrade E Silva & Esmeralda A. Ramalho, 2021. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Working Papers REM 2021/0186, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    4. Evangelista, Rui & Ramalho, Esmeralda A. & Andrade e Silva, João, 2020. "On the use of hedonic regression models to measure the effect of energy efficiency on residential property transaction prices: Evidence for Portugal and selected data issues," Energy Economics, Elsevier, vol. 86(C).
    5. Lozano, Julian E. & Elofsson, Katarina & Surry, Yves, 2021. "Heterogeneous impacts of large carnivores on hunting lease prices," Land Use Policy, Elsevier, vol. 101(C).
    6. Korom, Philipp, 2016. "Inherited advantage: The importance of inheritance for private wealth accumulation in Europe," MPIfG Discussion Paper 16/11, Max Planck Institute for the Study of Societies.
    7. Trojanek, Radoslaw & Huderek-Glapska, Sonia, 2018. "Measuring the noise cost of aviation – The association between the Limited Use Area around Warsaw Chopin Airport and property values," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 103-114.
    8. Huong Thu Le & Ha Trong Nguyen, 2018. "The evolution of the gender test score gap through seventh grade: new insights from Australia using unconditional quantile regression and decomposition," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-42, December.
    9. Victor Chernozhukov & Iván Fernández‐Val & Blaise Melly, 2013. "Inference on Counterfactual Distributions," Econometrica, Econometric Society, vol. 81(6), pages 2205-2268, November.
    10. Wesley Nimon & John Beghin, 1999. "Are Eco-Labels Valuable? Evidence From the Apparel Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 801-811.
    11. Männasoo, Kadri, 2022. "Working hours and gender wage differentials: Evidence from the American Working Conditions Survey," Labour Economics, Elsevier, vol. 76(C).
    12. Vincenzo Carrieri & Francesco Principe & Michele Raitano, 2018. "What makes you ‘super-rich’? New evidence from an analysis of football players’ wages," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 950-973.
    13. Jean-Marc Fournier & Isabell Koske, 2012. "The determinants of earnings inequality: evidence from quantile regressions," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 7-36.
    14. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    15. Wang, Wen & Lien, Donald, 2018. "Union membership, union coverage and wage dispersion of rural migrants: Evidence from Suzhou industrial sector," China Economic Review, Elsevier, vol. 49(C), pages 96-113.
    16. Mirco Tonin, 2014. "Reporting import tariffs (and other taxes)," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(1), pages 153-173, February.
    17. Akwasi Ampofo, 2021. "Oil at work: natural resource effects on household well-being in Ghana," Empirical Economics, Springer, vol. 60(2), pages 1013-1058, February.
    18. Silver Mick, 2022. "Econometric Issues in Hedonic Property Price Indices: Some Practical Help," Journal of Official Statistics, Sciendo, vol. 38(1), pages 153-186, March.
    19. Collischon Matthias, 2019. "Is There a Glass Ceiling over Germany?," German Economic Review, De Gruyter, vol. 20(4), pages 329-359, December.
    20. Volpe Martincus, Christian & Carballo, Jerónimo, 2010. "Beyond the average effects: The distributional impacts of export promotion programs in developing countries," Journal of Development Economics, Elsevier, vol. 92(2), pages 201-214, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-03914263. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.