One of the most memorable cases we read at HBS was a marketing case about diamonds. The professor began by asking everyone who was wearing a diamond to raise their hand (many went up) and then opened the discussion by asking how much each person thought their stone was worth. Many explained they knew because they had appraisals, certificates from jewelers, purchased from Tiffany’s, didn’t want to say in public, etc. We later read through the case which explained how diamonds have very little inherent value as they are not rare* and are simply carbon under pressure that can be manufactured “perfectly” from any carbon-based substance, so the supply and market value are artificially controlled via cartels, mostly by DeBeers. Until DeBeers created a market for diamonds as engagements stones, most engagement rings were plain bands or colored stones which were seen as more desirable than colorless stones. He ended by telling us to enjoy our jewelry but understand that any value we thought we had was simply a breathtaking marketing mirage that would hold only as long as the cartels remained strong. The diamonds themselves, regardless of the 4 Cs, were worth about the same as garnets.
At the molecular level, manufactured diamonds are exactly the same as naturally-occurring diamonds, but the manufacturing process can consistently turn out flawless stones of any size and cut. The cost difference for natural diamonds is simply based on the power of the cartels to control supply, set prices, and market a narrative of rarity/desirability. IMO, anyone opting for a natural diamond is foolish when the manufactured version is identical and perfection can be had for a fraction of the cost. The only way a jeweler might guess a stone is manufactured is based on it’s flawlessness, nothing else as the composition is identical.
*There ARE rare naturally-occurring diamonds whose size, color, and history make them unique and thus valuable. They reside in museums and the coffers of monarchs. They are not what you have on your finger.
ETA: Jewelers do everything in their power to oppose these facts as the mirage depends on the marketing. Ask a scientist instead.