Diamonds, it seems, never cease to dazzle and delight each February. Yes, diamonds continue to do very well as a Valentine gift.

For more than a century, diamonds have drawn top prices based on an illusion of scarcity. Not bad for compressed carbon that is hardly scarce, says Donna J. Bergenstock, assistant professor of economics and marketing, Muhlenberg College in Allentown, PA.

In 2001, Bergenstock collaborated with James M. Maskulka, one of her former Lehigh University professors, to publish a review of the world-famous De Beers diamond company. The article appeared in Business Horizons, a professional journal.

According to Bergenstock, diamond price stability is no accident. "Diamonds continue to carry the illusion of being rare and scarce," Bergenstock said. "It is interesting to note that diamond prices have little or no relation to the cost of extraction. The same mining process or effort is just as likely to unearth gem-quality stones as cheaper industrial stones.

Moreover, there is actually no world shortage of rough diamonds." Every attitude consumers hold today about diamonds exists -- at least in part -- because of the persistent efforts of De Beers, Bergenstock said. In "The De Beers Story: Are Diamonds Forever?" Bergenstock and Maskulka say the De Beers company spends about $200 million annually to perpetuate the myth that diamonds are rare, difficult to extract and therefore worth top dollar.

In addition, because De Beers controls nearly 70 percent of the rough diamond market, it is also the primary beneficiary of its marketing, Bergenstock and Maskulka say.

The Diamond Registry, a New York City organization devoted to the diamond trade, reports that consumption of diamonds in jewelry in the United States was about $21 billion in 2004.

Bergenstock said De Beers developed and continues to nurture a belief that diamonds are precious, invaluable symbols of love. Bergenstock also highlights the enormous success of a more than 50-year-old campaign created by advertising guru N. W. Ayer, who coined the expression "A diamond is forever."

In 1998, in an effort to continue to maintain dominance in the industry, De Beers developed a diamond branding technique to mark and number its diamonds, Bergenstock said. This marketing tool will help to combat price wars against synthetic and artificial stones, according to De Beers consumer marketing spokesman Stephen C. Lussler.

Will De Beers continue to control diamond pricing in the 21st century? As consumers become more aware of attractive synthetic diamonds, at a fraction of De Beers prices, just who will dominate the market is unknown, Bergenstock says.