Market-based approaches to tree valuation

Abstract

A recent four-part series in Arborist News outlined different appraisal processes used to value urban trees. The final article in the series described the three generally accepted approaches to tree valuation: the sales comparison approach, the cost approach, and the income capitalization approach. The author, D. Logan Nelson, noted that the sales comparison approach has the appeal of being based on observed market transactions. In this article, we outline the strengths and weaknesses of the sales comparison approach, define what type of value it estimates, and introduce the hedonic price method as an alternative, market-based method for valuing urban trees. We present results from a recent study in Portland, Oregon, that examined the value of street trees using the hedonic price method. The results from our study, although based on the Portland housing market, provide some broader insights into how trees affect house values.

Citation

Donovan, Geoffrey H.; Butry, David T. 2008. Market-based approaches to tree valuation. Arborist News. 2008(August): 52-55