Tree Appraisal

Different methodologies and strategies exist for appraising trees in a developed environment; TreeWorks employs the widely-used Cost Approach established by the Council of Tree and Landscape Appraisers’ Guide for Plant Appraisal, 9th Edition (CTLA).  In the Cost Approach, one of two formulas is applied.  If the appraised tree is of a size (trunk diameter) that can be replaced out of the stock of a regional nursery, the Replacement Cost Method is used; alternatively, if the tree is too large to be replaced, the Trunk Formula Method is used. Both methods use the same basic formula; the formula encapsulates the idea that the value of a given tree is equal to the local cost of buying and installing a replacement tree of similar size and species.  This base value, which represents an “ideal” instance of the tree (in perfect health and desirable location) is modified downward by the actual condition and location scores of the appraised tree.

Constants

All of these values are set by regional committees of the International Society of Arboriculture (ISA), and can be customized in TreeWorks to match local preferences and variances:

Replacement Tree DBH

The average trunk diameter of the largest tree normally available for most species from a local nursery

Installed Tree Cost

The cost to purchase and install the largest normally-available replacement tree

Unit Tree Cost

The average cost in dollars per square unit (in or cm) of trunk area, for such a replacement tree

Species Rating

Quality of species.  Each species is assigned a rating, and these values are contained in the species table in the geodatabase

Variables

These three variables are taken directly from each tree’s attributes:

·           DBH

·           Condition

·           Location

Replacement Cost Method

Appraised Value = Installed Tree Cost x Species Rating x Condition x Location

 

Note that in the above formula, the Installed Tree Cost is a standard (see above) dollar value, and the three modifiers are percent values (i.e. 0 to 1), so any modifiers of less than 100% adjust the dollar value downward by that much.

Trunk Formula Method

The trunk formula Method follows the above formula, but adds value to the installed tree cost based on a larger trunk area:

 

Appraised Value = Basic Tree Cost x Species Rating x Condition x Location

Where:

Basic Tree Cost = ( Trunk Area Increase x Unit Tree Cost) + Installed Tree Cost

Where:

Trunk Area Increase = (Trunk Area of Appraised Tree – Trunk Area of Replacement Tree)

(Trunk Areas are calculated using the trunk diameter ( DBH and Replacement Tree DBH ) values)

Additionally, for trees larger than 30 inches in DBH, trunk area for the purpose of this appraisal calculation was adjusted downward, based on the idea that a tree’s value would not increase proportionally to its trunk size beyond a certain point—conceptually along the lines of “diminishing returns”.