It sometimes becomes necessary to place a dollar value on a tree. As simple as that may sound, it can be as complicated as reading tax codes and legal jargon. Therefore, the purpose here is to introduce the novice to some of the methods used to establish tree value. It remains entirely another issue to decide which method applies, and which professional to consult in establishing that value.
This 'nuts and bolts' approach to tree valuation seems to make the most sense, but doesn't always apply in today's world. Using this method, tree value is established by filling in several parts of a mathematical formula which takes into consideration key factors about the tree. Most of these factors are expressed in the formula as percentages.
3 key factors are tree species, location and condition.
Some tree species are 'weedy' varieties and have much less inherent value than desirable ornamentals or quality hardwoods. For example, a Black Locust doesn't have near the species value of an Oak.
The old saying in real estate values is "location, location, location." That adage also applies to tree values. A well placed specimen tree in the center of your front yard has much more location value than one that is located in native woodlands out in a rural area.
This factor takes into consideration the overall tree condition relating to structure, wounds, roots and anything else affecting tree vigor and health. A tree with an open wound on the trunk is worth much less than a healthy one.
The other key part of this formula is a dollar amount which is plugged-in to represent the basic value by using the tree's girth. On large trees this figure is usually expressed as the number of "cross sectional square inches."
To find the cross sectional area of a tree trunk, use the same formula you used in high school math class to find the area of a circle:
3.14 times Radius squared (pr²)
Trunk diameter on large trees is measured at "breast height" which is 4-1/2 feet above the ground, and is more commonly referred to as DBH or Diameter Breast Height. To find the diameter of a tree, wrap a cloth tape measure or piece of string around the tree, and divide that length by 3.14.
Once you have the diameter, you can divide that length by 2 to find the radius:
Radius = ½ Diameter
Diameter = Radius times 2
Smaller nursery-sized trees that are readily transplanted are usually measured by their "trunk caliper" (diameter) anywhere from 6 to 12 inches above the soil surface, depending on their caliper size. Example: a 2 to 2-1/2 inch caliper tree is measured 6 inches above the ground.
Percent of Tree Damage
In the case of valuing a tree that was damaged but not killed, it is necessary to establish the percent of damage to the tree. This might apply in an instance where an automobile leaves the highway and strikes a tree, breaking off some lower branches and damaging part of the bark. Or it could be a tree that split in high winds, like the flowering Pear in the photo below. Even though half of this tree is left standing, the damage is extensive enough to be considered a 100% loss.
Crunching the numbers
For demonstration sake, our imaginary tree has a species value of 70%, a location value of 80% and a condition value of 70%. It has experienced 30% damage from an automobile collision. The cross sectional trunk square inch value at that time was $26.00 and our large 18-inch DBH tree contains 254 square inches. Here's the math: 254 x $26 x .70 x .80 x .70 x .30 = $776.63 loss
If a tree is totally wiped-out and can be replaced with a nursery-sized transplant, replacement value is fairly easy to establish. However, when a large tree is damaged, the trunk formula method outlined above is often used to establish tree value. That being said, the second method of establishing loss of value is tied to real estate value and discussed below.
REAL ESTATE VALUE
Another method of establishing tree loss value relates to real estate values. The basic value comparison deals with the property's fair market value before and after the damage occurred. Needless to say, this method makes loss values hard to nail down since you never really know fair market value until real estate is sold.
Another method deals with reasonable restoration costs by using several smaller trees to replace one larger one, cross sectional inch for inch. You are best advised to consult professional tree and real estate appraisers in your locale to learn more about the most commonly used method in your particular situation.