From http://www.gia.edu/diamond-quality-factor
One of the first things most people learn about diamonds is that not all diamonds are created equal. In fact, every diamond is unique. Diamonds come in many sizes, shapes, colors, and with various internal characteristics. All polished diamonds are valuable. That value is based on a combination of factors. Rarity is one of those factors. Diamonds with certain qualities are more rare—and more valuable—than diamonds that lack them. Jewelry professionals use a systematic way to evaluate and discuss these factors. Otherwise, there would be no way to compare one diamond to another. And there would be no way to evaluate and discuss the qualities of an individual diamond. Diamond professionals use the grading system developed by GIA in the 1950s, which established the use of four important factors to describe and classify diamonds: Clarity, Color, Cut, and Carat Weight.
One of the first things most people learn about diamonds is that not all diamonds are created equal. In fact, every diamond is unique. Diamonds come in many sizes, shapes, colors, and with various internal characteristics. All polished diamonds are valuable. That value is based on a combination of factors. Rarity is one of those factors. Diamonds with certain qualities are more rare—and more valuable—than diamonds that lack them. Jewelry professionals use a systematic way to evaluate and discuss these factors. Otherwise, there would be no way to compare one diamond to another. And there would be no way to evaluate and discuss the qualities of an individual diamond. Diamond professionals use the grading system developed by GIA in the 1950s, which established the use of four important factors to describe and classify diamonds: Clarity, Color, Cut, and Carat Weight.
These are known as the Four Cs. When used together, they describe the quality of a finished diamond. The value of a finished diamond is based on this combination. A diamond’s value is often affected by the rarity of one or more of the Four Cs. Colorless diamonds are scarce—most diamonds have tints of yellow or brown. So a colorless diamond rates higher on the color grading scale than a diamond that is light yellow. Value and rarity are related: In this case a colorless diamond is more rare and more valuable than one with a slight yellow color. The same relationship between rarity and value exists for clarity, cut, and carat weight. The Four Cs describe the individual qualities of a diamond, and the value of an individual diamond is based on these qualities. The terms that people use to discuss the Four Cs have become part of an international language that jewelry professionals can use to describe and evaluate individual diamonds. Today, the descriptions of each of the Four Cs are more precise than those applied to almost any other consumer product. And they have a long history. Three of them—color, clarity, and carat weight—were the basis for the first diamond grading system established in India over 2,000 years ago. Color Subtle differences in color can dramatically affect diamond value. Two diamonds of the same clarity, weight, and cut can differ in value based on color alone. Even the slightest hint of color can make a dramatic difference in value.
Diamonds come in many colors. Diamonds that range from colorless to light yellow and brown fall within the normal color range. Within that range, colorless diamonds are the most rare, so they’re the most valuable. They set the standard for grading and pricing other diamonds in the normal color range.
At the GIA Laboratory, diamonds are color graded under controlled conditions by comparing them to round brilliant diamonds of known color, called masterstones
Many diamonds emit a visible light called fluorescence when they’re exposed to ultraviolet (UV) radiation. Although invisible to the human eye, UV radiation is everywhere. Sunlight contains it. Fluorescent lights emit it, too. Under the right conditions, you can see fluorescence in about 35 percent of gem diamonds. Blue is the most common fluorescent color in gem-quality diamonds. In rare instances, fluorescence can be white, yellow, orange, or many other colors. Strong blue fluorescence can make a light yellow diamond look closer to colorless in sunlight. Blue and yellow are color opposites and tend to cancel each other out, so blue fluorescence masks the yellow color. If the fluorescence is too strong it can make the stone look cloudy or “oily,” which can lower the value of the diamond.
Clarity Few things in nature are absolutely perfect. This is as true of diamonds as anything else. Diamonds have internal features, called inclusions, and surface irregularities, called blemishes. Together, they’re called clarity characteristics. Clarity is the relative absence of inclusions and blemishes. Among other things, blemishes include scratches and nicks on a diamond’s surface. Inclusions are generally on the inside, and some might break the surface of the stone. Sometimes, tiny diamond or other mineral crystals are trapped inside a diamond when it forms. Depending on where they’re located, they might remain after the stone has been cut and polished, and they can affect a diamond’s appearance. Clarity characteristics might have a negative influence on a diamond’s value, but they can have positive effects as well. For one thing, they help gemologists separate diamond from imitations. (This is easier with included diamonds than with flawless ones.) And because no two diamonds have exactly the same inclusions, they can help identify individual stones. They can also provide scientists with valuable information about how diamonds form.
Like the rest of the Four Cs, clarity’s influence on value is directly related to the concept of rarity. Flawless is the top grade in the GIA Clarity Grading System. Diamonds graded Flawless don’t have visible inclusions or blemishes when examined under 10-power (10X) magnification by a skilled and experienced grader.