Comparing Formula Methods of Tree Appraisal

Description of Formula Methods

Each of the formula methods chosen had a somewhat different approach to tree appraisal. Simplified descriptions of each method (and country of origin) are given below to help the reader understand the basic concepts of each method. Readers with an interest in the details of each method are referred to the original publications.

Guide for Plant Appraisal, 8th edition (United States). This method has been widely used since 1951, and a 9th edition was published in 2000 (CTLA). The 8th edition (CTLA 1992) was the most recent edition when this study was conducted. Its method is based on a measurement of the cross-sectional area of the tree trunk at 1.4 m (4.5 ft) multiplied by a monetary value per square inch. This maximum value is then reduced by factors for species quality, condition, and location in the landscape (0.0 to 1.0 for each factor). The value per square inch is based on the cost of the largest commonly available trees (per square inch of trunk area) at regional nurseries. (For simplicity’s sake, certain complexities of the 8th edition are not discussed here but were included in the calculations.) The cost per square inch and species rating were determined by a regional committee. This method will be referred to as the CTLA method.

The simplified formula of the CTLA method is

Revised Burnley Method (Australia) Developed at the Victorian College of Agriculture and Horticulture Limited, Burnley Campus, this method was first published in 1988 (McGarry and Moore) and revised in 1991 (Moore). It is similar in concept to the CTLA method, and it is also based on tree size and a unit monetary value. Tree size is measured as volume of the tree approximated by an inverted cone. The tree volume is multiplied by the cost per cubic meter of retail nursery stock (presumably of the same species). This maximum value is then reduced by factors for life expectancy (0.5 to 1.0), form and vigor (0.0 to 1.0), and location (0.4 to 1.0). Like the CTLA method, all factors reduce the base value. Unlike the CTLA method, not all factors can bring the value to zero. This method will be referred to as the Burnley method. The simplified formula is

Amenity Valuation of Trees and Woodlands (Great Britain) Based on Helliwell (1967) and most recently revised in 2000 (Helliwell), this method focuses on visual amenity and rates seven factors at 1 to 4 points each (occasionally less than 1). A low rating of 1 for any factor would have no impact on the appraised value. The factor points are multiplied together and then by an assigned monetary value per point (£14 in 2000 revision). The U.S. equivalent in dollars was used for the calculations in this study. This method will be referred to as the Helliwell method.

*The published method includes a procedure for determining tree age, but this method did not work in northern Illinois when tested on trees of known age. Instead, appraisers were asked to estimate life expectancy by whatever method they felt appropriate, which is also done in the Burnley and Norma Granada methods.

Standard Tree Evaluation Method—STEM (New Zealand). This method was new in 1996 (Flook). Like the Helliwell method, it uses a point system to rate 20 tree attributes (3 to 27 points for each attribute) in three general categories of condition, amenity, and notable (special merit) qualities. The attributes rated are

• Condition

  • Form

  • (Frequency of) occurrence

  • Vigor and vitality

  • Function (usefulness)

  • Age (years)

• Amenity

  • Stature (greater of height or spread)

  • Visibility (km)

  • Proximity (presence of other trees)

  • Role

  • Climate

• Notable (only for trees over 50 years old)

  • Stature

  • Feature (exceptionally large/special visual interest) Form (outstanding example/specimen)

  • Historic

  • Age (100 years +)

  • Association (with event, person, tradition, etc)

  • Commemoration

  • Remnant (of a native ecosystem)

  • Relict (survived change from natural to artificial environment)

  • Scientific

  • Source (quality of genetic derivation)

  • Rarity (of species)

  • Endangered

The point total is then multiplied by the wholesale cost of a 5-year-old tree (no indication of species specificity). To that is added the wholesale cost of planting the tree and the cost of maintaining the tree until it reaches the same age as the tree that was lost. Finally, the figure is multiplied by a factor to convert from wholesale to retail (doubling suggested). This method will be referred to as STEM.

Norma Granada (Spain). This method was first published in 1990 and revised in 1999 (Asociacion Española de Parques y Jardines Publicos). It uses a series of tables dealing with tree species (growth rate and longevity) and size factors to determine a “value factor” (valores del factor). This value factor is multiplied by the wholesale cost of a nursery-grown tree to determine the initial value. Like the CTLA and revised Burnley methods, factors related to tree condition and position in the landscape are used to adjust this value. Unlike these other two methods, condition rating can either increase or decrease the value (a tree in average condition will have no effect). Life expectancy and “extrinsic” attributes of the tree can only increase the basic value. The maximum theoretical value of the tree is eight times the initial value. This method will be referred to as the Norma Granada method.

Methods Comparison in the Field

On September 23, 1999, nine individuals with professional interest in the value of urban trees independently appraised six trees located on the grounds of The Morton Arboretum in Lisle, Illinois, U.S., using the five methods. Before beginning the appraisals, the five formula methods chosen for the exercise were reviewed.

Trees of six different species were chosen for the methods comparison study. The species included were pin oak (Quercus palustris), American elm (Ulmus americana), linden (Tilia spp., an unusual species that would not have been identifiable by the appraisers), Kentucky coffeetree (Gymnocladus dioica), European beech (Fagus sylvatica), and European ash (Fraxinus excelsior). The trees represented a broad spectrum of those that could be encountered in the landscape, and they included contrasts in size, species quality, and landscape position (Table 1). The six appraisers were not given this information until after the appraisals were complete.

Appraisers were provided with a field data sheet for each tree for recording the data required by each method. There was a separate column for each method. Similar data required by each method were organized in rows so that they could be recorded at the same time (e.g., life expectancy).

Information related to size or species quality that was readily measurable, or available as part of the published method, was already entered on the data sheet to facilitate the evaluation process (Table 1). Wholesale nursery stock prices required by some formulas were averaged from up to four regional (northeast Illinois) nurseries for each species and size required. Where no species-specific prices were required, an average of the cost of all six species included in the study was used (Table 2). Retail costs were established as twice the wholesale cost. Annual maintenance cost for STEM was calculated as 14% of the retail cost of the tree and planting, based on the method used by local landscape maintenance contractors (personal communication with a local contractor). The species rating, cost per square inch of trunk area, and installed tree cost used in the CTLA method were determined by a regional committee for northeast Illinois.

For each species, appraised values resulting from the different methods were compared using one-way ANOVA (P = 0.05). Separation of means was tested using the Student-Newman-Keuls test (P = 0.05). The coefficient of variation [(standard deviation/mean) × 100] was used to compare the magnitude of variation in appraised values among the methods.

In real situations, trees are usually appraised by two appraisers, one from each of the opposing sides. To reflect this type of realistic appraisal situation, the average difference (percentage) in appraised value between pairs of appraisers was calculated. This was done for each tree by averaging the difference between all possible combinations of two appraisers, dividing by the mean appraised value, and then multiplying by 100.

Influence of Individual Factors

Tree size. Trunk measurements are used to measure size in the CTLA and Norma Granada methods and are presumably used as a proxy for crown size. Not unexpectedly, the linden with the large trunk was the most valuable of the six trees using the CTLA method (Tables 1 and 3). This is the only method that uses cross-sectional trunk area (an exponential calculation) as the measurement of size. Area increases much faster than diameter or circumference, and the value of trees increases rapidly with size.

The Norma Granada method also uses trunk circumference to measure size. The linden also had a high value using this method, but the linden was not the most valuable tree using Norma Granada (Table 3). For trunk diameters greater than 76 cm (30 in.), increases in the value factor are negligible with this method. Therefore, the appraised value of the linden with a substantially larger trunk diameter would not be expected to be greater than the four other trees also over 76 cm dbh based on size alone.

With the Burnley method, the size is measured as canopy volume, another exponential calculation. The linden had only the second largest crown volume (Table 1), but the ash with the largest crown was valued lower than the linden, and the beech with a slightly smaller crown than the linden was valued higher than the linden. The other factors apparently influenced value as much or more than size in the Burnley method.

The Helliwell method uses cross-sectional area of the crown to measure tree size. Using the size classes specified in the method, all five of the large trees fell into either the large or very large category. This resulted in only a one-point difference between trees, and size is one of seven factors multiplied together. Thus, size has relatively little influence on value. STEM uses a linear measurement of crown size, and again is one of many factors having relatively little influence on value.

Species. The influence of species quality on appraised value also varies with method. The largest difference due to species quality was found in the CTLA method. Pin oak and American elm are generally considered high and low species quality in the region (0.7 versus 0.2 rating, respectively, in the Illinois rating list) and were similar in size. The appraised values reflected this difference.

Neither STEM nor the Helliwell method considers species directly, using only indirect species-related measures such as longevity and rarity, and the difference between appraised values of the oak and the elm were not great. Species quality influences the Burnley method through indirect measures and also the variation in the price of nursery stock, but this does not account for the threefold difference in value between the elm and oak. Other factors apparently had a greater effect.

For the Norma Granada method, both the value factor [e.g., 439 to 955 points for a 76-cm (30-in.) dbh tree] and price of nursery stock are influenced by species. The 50% difference in value exhibited between the elm and oak was in line with differences in value factor (60%) and the nursery stock price (20%, Table 1).

Location. The beech and ash were examples of similar size trees in prominent and obscure locations in the landscape. The Helliwell method produced the largest difference (more than fivefold) in appraised values. Three of the seven factors rated in this method are related to location. Five of the 20 factors rated in STEM (probably no more than a total of 12 in practice because the participating appraisers rarely rated more than one or two of the “notable” category factors) are related to location, but the difference between the two trees was small (1.4-fold). It was not clear why the difference between the two trees was so small. It may be because of the many equally weighted factors that are simply added together and the resulting inability of any one factor to have a large influence in value. The difference between these two trees using the other three methods was 1.9- to 2.6-fold and very much in line with the location components of the formulas.

Condition. No trees in poor health were available for testing the formulas. Analysis of the formulas suggests an effect similar to location for CTLA, Burnley, and STEM. The Norma Granada method is unique in that condition factors can either increase or the decrease basic value (0 to 200%). An average condition has little or no effect. Condition may affect values produced by the Helliwell method the least, because condition or health is not rated directly.

Special Factors. The degree to which “notable” or “extraordinary” factors influence the appraised value varies. Up to 10 different “notable” factors could be used in STEM, contributing up to 50% of the total points in extreme cases. On a practical basis, ratings in all categories would be unlikely on any single tree. The examples of “notable” trees used in the STEM publication (Flook 1996) generally scored points in 3 to 5 of the 10 categories, or less than 25% of the total points for the tree. Appraisers participating in this study rarely rated more than one or two of the “notable” category factors, increasing the appraised value very little. The Norma Granada and Helliwell methods treat special factors as a single specific factor and could have about the same influence on appraised value as condition or location. The CTLA method treats special factors only as a consideration in determining the location rating and would have minimal influence on appraised value. Special factors are not mentioned in the Burnley method.

Differences Among Appraisers

The differences among appraisers using the same formula method are sometimes large (Kielbaso 1979; Rey-Lescure 1985; Abbot and Miller 1991; Helliwell 2000). The coefficient of variation (CoV) is a good indicator of the variation within each method due to the individual appraisers. For every tree, the highest CoV was associated with the Helliwell method and the lowest with STEM (Table 4). There seems to be strong relationship between the CoV and the mathematical operations used in calculating the values. Both Helliwell and STEM use a system that assigns points to various attributes (size, health, aesthetics, etc.). The Helliwell method multiplies all seven attributes together, while STEM adds up to 20. The CoV is seven times higher in the Helliwell method. Using the Helliwell method, if two appraisers are as little as one point different on a single factor, with everything else being identical, the appraised values may differ by up to 100%. The CoV of the other three methods are intermediate and similar. Each method uses two or three multiplication operations in the formula.

Though multiplication increases variation, using it does allow for the appraised value to be zero if a low rating of a single factor should render the tree worthless. For example, if the health of a tree is very poor, or it is extensively decayed and represents a hazard, it may have no value. A zero condition/health rating would accomplish this when the condition/health factor is multiplied against the other factors, but not if added to the others. Some provision for a zero appraised value is probably needed in methods not multiplying factors together.

Some variation is undoubtedly due to the largely subjective evaluation of tree attributes by the appraiser. The amount of guidance provided for assigning numeric values to factors related to health condition and to aesthetic and functional attributes varies by method. Some provide detailed rating scales or tables; others rely heavily on the expertise and experience of the appraiser.

Inconsistency between appraisers has long been a concern. Excessive variation between appraisers (using the same method) can undermine the credibility of the appraisal method. The CTLA method has been criticized for excessive differences between appraisers (Kielbaso 1979; Rey-Lescure 1985; Abbot and Miller 1991). These authors considered differences as great as twofold to be acceptable. The Helliwell method itself (Arboricultural Association 1994; Helliwell 2000) suggests that a twofold difference between two appraisers would be acceptable.

These comments on “acceptable difference” were made in the usual context of two appraisals of the same tree. The average difference between two appraisers may be a better method of judging variation than the CoV. Variation seems quite acceptable for all trees and methods when viewed this way (Table 5). For example, if two individuals appraised the pin oak using the CTLA method, the difference between them would have averaged $45 for every $100, well within the acceptable range of a twofold difference. Using the Helliwell method, the difference would have averaged $88 for every $100 of appraised value—greater, but still within the limits of acceptability.

Though the average difference between two appraisers seems acceptable for all methods, it is possible that the two appraisers producing the highest and lowest values could be called upon to appraise the same tree. Again with the pin oak as an example, using the CTLA method, the high and low appraisers were $109 apart for every $100 of appraised value—double the average difference and just over the acceptable twofold difference. Using the Helliwell method, the maximum difference would have averaged $275 for every $100 of appraised value—far too high to be acceptable.

Both average and extreme differences between appraisers may be somewhat greater in real-life situations for a variety of reasons. Skills and experience of appraisers can vary more widely than they did for this group of experts. This group was also supplied with identical information simultaneously. In real-life situations, appraisers are often provided information separately and may not be working from identical background information.