“What is this worth?” is one of the most common questions I’m asked as a gemologist.

It sounds like a simple question, but it rarely has one simple answer.

A single piece of jewelry can have several very different values depending on why you need to know.

Insurance replacement value estimates what it would reasonably cost to replace an item with one of comparable quality in the appropriate retail market. This is often the highest number someone sees associated with their jewelry—and probably the most misunderstood.

People often bring me an appraisal and assume that if the piece is appraised for $15,000, they should be able to sell it for $15,000. Or that $15,000 is what someone else should be willing to pay for it.

That isn't what an insurance appraisal means.

Fair market value is different. It considers what a willing buyer and willing seller might agree upon in the appropriate market, with neither under pressure to act. This type of value is often used for estate, tax, charitable donation or legal purposes.

Then we have the secondary market, and this is where things get interesting.

I sometimes tell people, “Your jewelry is worth what someone is willing to pay for it.” It sounds like I’m being sarcastic, but I'm not.

You can price something at almost any number. The question becomes: How long are you willing to wait for the buyer who agrees with you?

Price it where there is strong demand and it may sell quickly. Price it at the very top of what the market could possibly support and you may wait months or even years. In many cases, the difference between those numbers isn't the jewelry. It's time.

And jewelry has another variable that is difficult to put into a formula: beauty is in the eye of the beholder.

Diamond shapes are a great example. Fancy shapes come in and out of style over the years. Marquise diamonds can be everywhere for a decade and then suddenly difficult to sell. Ovals, pears, cushions and emerald cuts all cycle through periods of stronger and weaker demand. That demand affects pricing and even access to certain shapes. The diamond itself hasn't changed. The market around it has.

The same is true of jewelry styles, designers and periods.

There are also pieces whose value isn't simply the sum of their gold and gemstones. Maker, age, rarity, condition, provenance and originality can dramatically affect value. An antique or signed piece may be worth considerably more intact than its individual components.

Sometimes the most important step isn't assigning a dollar amount at all. It's first understanding exactly what you own.

So when someone asks me, “What's this worth?” my first question is usually: 

“For what purpose?”

Because replacement value, fair market value and what someone will actually hand you a check for today can be three very different numbers—and all three can be correct.