I
have been in a lot of major cities in my lifetime, and several of them have a
thriving diamond district. Click here to read an interesting take on why
diamond shops in most major cities tend to locate close to each other. The basic argument is that it lowers search
and information costs for diamond customers.
I am not sure if this is totally correct. Another possible reason why diamond shops may
locate close to one another is that by being close together, they lower their
joint security costs. Given the density of
diamond shops in one area, one would expect more cctv, police patrols etc.. Notably, all of the major diamond shops near
Hatton Gardens in London are two minutes away from the nearest police station!
