Looks like someone got up on the wrong side of the bed.
Read it again Opal, it’s right there. I’m merely saying your statement doesn’t apply in a macro-economic sense - the context in which I think reddragon made his remark. I go on to say that I think I know what you meant to say, even.
But I suppose if you really want to misinterpret it, there’s always a way. I’ll think again before I try to offer another impartial explanation to you.
Another economist by trade checking in. The diamond market is not macroeconomics, which deals with aggregates. It’s micro. I guess what Coldfire might have said is that at the market level prices are determined by demand and supply and that a high willingness to pay combined with low, inelastic supply (and cartel behaviour) produces a high price. True enough.
That being said, Opal’s argument has some backing in the literature, notably in Yew-Kwang Ng’s paper in the American Economic Review (the top journal in economics): Diamonds are a Government’s Best Friend (and a follow up article somewhere else) in which he argues that there are some goods valued by consumers because their prices are high. He fits this neatly enough into orthodox utility theory and even (in the case of goods with what he calls “imperfect diamondness” – very swanky cars perhaps) derives upward sloping compensated (Hicksian) demand curves. Very weird. (The completely different Giffen good Coldfire mentions has an upward sloping uncompensated (Marshallian) demand curve and – if it ever existed would have been something like potatoes or rice in very poor countires. In real life it is only used to torture undergraduates.)
As you might expect, this has some optimal tax implications which are not dissimilar to the sorts of things you might have heard when TVeblen was a male economist and not a female moderator.
So I’m a sucker. I knew it. I fell for the whole “you’ve got to get a diamond” thing years ago when I got (briefly) engaged. I shopped around for a couple of months but when the story is the same everywhere you look (i.e.: high/inflated prices everywhere), you become desensitized and resign yourself to the fact that you’re going to be spending some cash.
I was smart enough [sub](all things relative)[/sub] to buy the stone separately, though, and have the setting made, rather than buy some stamped-out commercial thing. The only thing I have to be thankful for about the whole affair is that I got the ring back when it was all over…well, if you can consider that something to be thankful for, anyway. I shan’t make that mistake again. (BTW, we broke up because, surprise surprise, she turned out to be a gold-digger and dropped me for a trust-fund baby.)
So, if anyone wants a diamond (and I know many of you have stated how much you don’t care for them, but…) I’ve got a stunning 75 point, VVS2, G, round perfect sitting around collecting dust. Make an offer 
Now, to the fun part of my post (and I know I’ve mentioned this somewhere before, but I love this thing):
There was an episode of The Family Guy where they got an inheritance and the wife was telling her husband how she didn’t need all the glitz and glam, but he was completely taken in by it. There is this scene where he says “You deserve nice things…like diamonds!” and they flash to a DeBeers-like commercial (you know, all the shadow people and stuff). They show a man and a woman running toward each other. The man slips a diamond ring on the womans hand and you see her smile. They pan out and you see the man and woman facing each other, then, in the last second before they cut away, you see the woman start to go down… Cut to the closing line: “Diamonds. She’ll pretty much have to.” I swear I nearly pissed myself laughing at that bit.
Yeah ok whatever. I’ll go cry now. :rolleyes:
Anyway, there is a really expensive stone that I’d like to get… but probably won’t because it’s so expensive… I’d love an alexandrite ring…
Whoa now. I think there’s two aspects here.[ul][li]If a customer is willing to pay $600 dollars for a stone that’s worth $200 in karat value and $100 in labour, that’s a micro-economic phenomenon.[/li][li]If the general per-karat price of diamonds goes sky high because a mine in South Africa explodes, that’s a macro-economic phenomenon.[/ul][/li]Maybe we ought to separate the two: trade in crafted jewelry follows micro patterns, whereas trade in crude diamonds follows macro patterns.
More specifically, that’s the context I interpreted reddragons comment in. He was right in a macro sense, and Opal was talking about individual (micro) phenomena. I tried to point out the difference, since both were right in their own way.
Wow! Obviously, I was not aware of this article. When was it published? Is it avaialable online?
Nothing short of amazing, if he pulls that off. Ever since I graduated in 1997, I have not been keeping up with the literature like I should have. Seeing things like this re-ignites my interest again!
Completely different indeed. As said, I only used it to demonstrate that (to my knowledge) the Giffen good was the only one known in Economic theory that fit the “the higher the price, the more desirable it becomes” logic.
It’s mainly a tool to make students understand price mechanisms (and the exceptions to them), but there are documented cases of Giffen goods. Your example of basic food in poor countries is spot-on: going from memory, I seem to recall the Irish potato prices during the famine of the mid-1800’s being used as a textbook example of Giffen price behaviour.
Thanks for the education, picmr. Great stuff!
I like diamonds. They’re sparkly.
Yep, I like diamonds too. I don’t look at my engagement ring and think, “Boy, he must really love me because he bought me a pretty diamond.” Instead, I think, “Boy, he must really love me because he wants to marry me.” And he wanted to give me a beautiful diamond because it is so sparkly!
And to repeat a tired old phrase, “It is MY money, and I’ll spend it how I want. Just because YOU wouldn’t buy it, doesn’t mean I am a jerk for wanting it.”
My first engagement ring was an emerald; my current engagement ring is an emerald. Both times, everyone I knew (including my first husband) kept saying, “But…it’s just an emerald…don’t you want a diamond??” But I really do like emeralds better, and I’m just enough of a non-conformist that I didn’t want what everyone else was getting. Besides which, I like colored stones (semi-precious in particular) and I think they become me better than diamonds do. The only one who didn’t think I was a loon for my decision re: the ring is my husband now (the second). Yet another reason why I still think one of the best decisions I ever made was to marry him…;D
No slams on those who prefer diamonds, btw; I have seen a few that were absolutely beautiful, and some women just wear them better. I’m just not one of them.
The one problem I do have in finding semiprecious pieces I like is that I do prefer gold; silver leaves 'orrible tarnish marks on me and while I like the looks of it, it doesn’t look right on me. Since most semiprecious stones I’ve seen are set in silver (and most actually look better with silver, IMHO), that kind of limits my options. I still think malachite set in gold would be beautiful, with the right quality of stone. Obsidian, amber, amethyst…those are great, and I’d love a black opal, if I could get one.
If I had my druthers, though, I’d go for a set of black star sapphires set in gold accented with tiny diamonds. Not the created ones with the raised star; the ones that are kind of a dusty black velvet color with sort of a gold hint in the depths…mmm.
Whoever said go to an indie jeweler for designs was right on the mark, though. I’ve been fortunate enough to get a few custom pieces (including a wedding band that had to be molded to fit my first engagemen ring – the stone was offset and a regular band wouldn’t fit) and what I ended up with was better quality, was unique and actually fit me without having to be sized down. Can’t get that at the mall…
The reference Coldfire requested:
Ng, Yew-Kwang Diamonds are a Government’s Best Friend: Burden-free Taxes on Goods Valued for their Values, American Economic Review, 77 (1987): 186-191. The article is available online, but you would need jstore to get it. It’s fair to say that this is an obscure corner of consumer theory.
Ng puts into standard utility theory pretty simply:
The indiviual’s utility function is U(p[sup]1[/sup]x[sup]1[/sup]/p[sup]n[/sup], x[sup]2[/sup],…, x[sup]n[/sup]) where x[sup]1[/sup] is diamonds and p[sup]n[/sup] is the numeraire. Goods with the property of imperfect diamondness would also enter directly into the function.
As for his argument:
In other words, if everyone’s diamonds were 10% smaller no-one would be be worse off – they would all have the same value of diamonds. Arbtirarily high taxes up to (close to) the entire value of the market would not only have no excess burden (triangle of welfare loss) but no burden at all (!)
On a less dry note:
And he’s prepared to publicly post a non-refundable bond to secure my services! [runs fast]
[blissful, inane Gomer Pyle voice] I knew it! I knew it! I jess knew it! [/Gomer] If I stuck around long enough my bizarre screen name would crop up in a perfectly legitimate thread! ::grins like a mule eatin’ thistles::
Wanders off happily, bumping into walls,
Veb
Stranger things have happened…
PS: Happy 3K Veb! Looks like we both rolled over the postometer on the same day.
**
Platinum is a silver colored setting, as is white gold, neither will tarnish. Probably you’d have to go to a custom jeweler, tho’ to get something set w/a semi precious stone. I can attest to the fact that Malachite looks lovely with yellow gold (hoop earrings from daddy - a gold post with a loop where in you can insert any of 5 different semi precious hoops - malachite, pink quartz, ivory, black onyx and hell, what’s that blue semi precious stone called?)
You mean one of the two most precious ancient Egyptian stones?
Carnelian and <cough> Lapis Lazuli?
I’d almost said Lapis, but stopped myself, 'cause I was pretty sure it wasn’t. So finally remembered to check (when dad gave 'em to me, he included a teeny tiny sticky note that’s still in the case, with the names of all the stones, of course I’d had no problem remembering/ recognizing four out of the five)
It’s called “soda lite”. or so says the sticky note that dad put in there. medium blue with white flecks. pretty interesting look.
Wring, my dear,
I wish that I could share with you a snuff box from the “Treasures of Dresden” exhibit that toured through San Francisco’s now defunct De Young museum over twenty years ago.
Each panel of the 20-30 facet 3" in diameter box was dressed in a gold foil Tiffany sort of binding. All of them were spectacular specimens of semi-precious to “non-precious” stones like Brazilian crazy lace agate and other elaborately patterned minerals.
Accompanying the box was a document that listed every single inset with the type of stone that it was, where it came from and how it typically manifested to the average prospector. To me, it was the ultimate educational geological toy.
I thought you might appreciate this memory from decades ago.
As J.P. Getty once said;
“The weak may inherit the earth… but not its mineral rights!”
I love diamonds. I have several but I have never paid full price for them, not would I want to. My current engagement ring was my merman’s grandmother’s. My original ring had a pitifully small stone-probably 10 points and is still very precious to me although it sits in my jewelry box worn out and waiting to be redone. My only “big stone” is a family heirloom, 1 flawless, colorless carat set in platinum with baguettes. Appraised at about $4,000, it sits in the safety depposit box most of the time cause even though it’s insured, I don’t’ want to take the risk of losing or being robbed of it.
I have several CZ pieces that are stunning, set in precious metals and look like a million bucks. I wear them constantly, get loads of compliments on them and enjoy them just as much as “the real thing”. They look plenty real to me.
I prefer colored stones. My current fav is ametrine-it’s in the quartz family and is the part of the crystal that has both citrine and amethyst. I am fascinated by the colors in opals. My birthstone is aquamarine and I am amazed by the way it’s colorless when viewed from the side but the color comes out when faceted. I also love tanzanite,lapis, sapphire, jade, marcasite and garnets.
I recently purchased a scarab bracelet and a pendant of leopard-skin jasper set in silver. It is a nice cabochon with a leopard skin pattern.
Oh yeah I definately prefer the colored stones.
I have a bunch of gaudy, huge cheap costume jewelry, especially rings, that I adore. It’s the colors and the interesting look of them that I like.
Some are so gaudy I just wear 'em around the house, or out with my friends.
does sound lovely! any pictures of it available anywhere?
I wish! Maybe in my catalog that I bought at the musuem shop. I’m still lookin’ forward to the pics of your dad’s work.
Ever since I realized that one of my mom’s diamond earrings cost $300 and that a piece of paste from Ardène that looked even sparklier cost $5, I’ve been a big fan of fake, as well as genuine semi-precious, stones.
When I was a kid I made my mom a pair of malachite earrings (cost me $4 or so for the stones and another $1 for the posts). The other Christmas I bought her an amethyst pendant on a silver necklace for about $20. Both times she was wowed. The amethyst in particular looks gorgeous.
I love to wear jewelry, but not expensive jewelry. (I’d feel way nervous and self-conscious.) I would much prefer something meaningful to me.
On a daily basis I wear a silver hoop I bought for 15FF in Paris, and an identical one that cost $5 here; a pendant earring I made from a silver rune, which I gave to my ex Eric and that he gave back to me, that cost $10 or so; a silver Celtic ring that my ex Matt gave me ($20); and a glazed black and hematite-coloured ceramic-bead bracelet that I bought while strolling downtown with Eric ($5).
I also wear a variety of necklaces, all of which have some significance for me (the most important to me are my pentacle, which I bought just after I began to practice Wicca, and the pride necklace my best friend Hamish made for me, with a silver “guardian fairy” on it).
Anyway, my tastes in jewelry are inexpensive and simple, and the same will go when I get engaged/married.