Diamonds are sold by weight, and the carat, often confused as a measure of the diamond's size, is actually the measurement of the diamond's weight. Each carat is equal to 0.2 grams. Of course, while weight is an important factor in a diamond's price, there are many other factors that can have a greater effect on the ultimate price of a diamond. Cut, color, and clarity are all important factors as well. How big of a diamond do you need? That's a very personal decision, and one that must be balanced between cost, cut, color and clarity. Of course, the larger the diamond, the more you can expect to pay for it, however the price does not increase on an even scale. A 2 carat diamond will not be twice the cost of a 1 carat diamond, despite being twice the size. The larger the diamond, the rarer it becomes and as such the price increases exponentially. The price per carat really depends on the total weight of the individual diamond.How did the carat system start?The carat, the standard unit of weight for diamonds and other gemstones, takes its name from the carob seed. Because these small seeds had a fairly uniform weight, early gem traders used them as counterweights in their balance scales. The modern metric carat, equal to 0.2 grams, was adopted by the United States in 1913 and other countries soon after. Today, a carat weighs exactly the same in every corner of the world.