The Trunk Formula Technique of tree valuation: trunk area, unit cost and three depreciation ratings

This page reports what the official source says. It is not legal advice: ask the office named here. It describes the Trunk Formula Technique (TFT) as Purdue University Extension, the Ohio Chapter of the International Society of Arboriculture (ISA) and the ISA journal word it, on pages and documents read on October 9, 2026. It does not value any tree and gives no unit cost: the unit costs in the sources are regional survey figures for one state and one period. Other methods are set side by side on the page comparing CAVAT and i-Tree Eco.

Where the technique sits

Purdue Extension says the Guide for Plant Appraisal, 10th edition, written by the Council of Tree and Landscape Appraisers (CTLA) and published by the ISA, describes three approaches to appraising trees and landscapes: the cost approach, the income approach and the sales comparison approach. The TFT is one technique inside the cost approach, used for larger trees in the landscape. Purdue says it extrapolates the cost of buying the largest commonly available nursery tree up to the size of the tree being appraised. It adds that trees under 4 caliper inches, or an 8-foot conifer, are figured at retail cost instead.

The Ohio Chapter's guide says the 10th edition came out in 2019 and made notable changes from earlier editions. It quotes the 10th edition as naming two techniques for trees larger than a local nursery sells, the TFT and the cost compounding technique, and says the TFT is one tool for some situations and not the preferred tool for all of them.

The steps as Purdue lists them

Step	What Purdue Extension says
Basic reproduction cost	The cross-sectional area (CSA) of the tree times the unit tree cost (UTC) set by the Regional Plant Appraisal Committee (RPAC) or taken from the local wholesale cost
Depreciated reproduction cost	The condition rating times the functional limitations rating times the external limitations rating times the basic reproduction cost
Total additional costs	Clean-up, installation and maintenance, counted when a tree is removed and a new one installed with post-planting care for a set time
Total reproduction cost	The depreciated reproduction cost plus the total additional costs
Appraisal value	The total reproduction cost, rounded

Purdue gives the trunk area as the radius squared times 3.14, from the diameter at breast height measured 4.5 feet above the ground. The Ohio guide gives the same area as 0.7854 times the diameter squared. For rounding, the Ohio guide says to carry two decimal places through every step and round only the final result, to 3 or 2 significant figures. Purdue's worked example rounds to the nearest thousand.

The three depreciation ratings

Purdue and the Tree Care Industry Association's magazine, in an article by the same Purdue author, describe the three ratings in the same words. Condition is the overall health of the tree: vigour, pests, stress symptoms, and the structure and form of the branches. Functional limitations are factors tied to the tree or its site that may limit growth and health, such as nearby utility lines that force clearance pruning, or poor branch systems, pest susceptibility or invasive tendencies of the species. External limitations are matters outside the owner's control, such as water availability, pest threats, utility vegetation management conflicts. Purdue adds local ordinances, easements and rights of way. Purdue says the appraiser assigns a rating to each of the three and multiplies the basic cost by them.

What the Ohio supplement changed and added

The Ohio Chapter's Guide to Appraisal of Trees and Other Plants in Ohio, eighth edition of 2020, is a supplement to the 10th edition and not an alternative to it. It says the Ohio committee surveyed 14 wholesale nurseries in late 2019 and early 2020 on several species and found the largest commonly available nursery-grown tree to be about 3 and a half inches in trunk caliper, measured 6 inches above grade. It defines the unit cost as the wholesale cost to a landscape professional, without transport or installation, and says the committee plans to update the data at least every two years. It warns against using nursery-based unit costs for trees in natural woodland, quoting the 10th edition on seedling costs for forestry or woodland settings. It also says the TFT in the 10th edition does not apply a species percentage rating directly, as earlier editions did: species attributes enter through the functional limitations rating.

The earlier formula in the 2002 study

The 2002 Arboriculture and Urban Forestry study compared formula methods from five countries and described the US method of the time, the 8th edition. It says that method multiplied the trunk cross-sectional area at 4.5 feet by a value per square inch based on the largest commonly available nursery trees, then reduced the figure by factors for species quality, condition and location, each from 0.0 to 1.0. In that study the US method and the Helliwell method gave the lowest values.

What Purdue says about limits

Purdue says the TFT is only one way to appraise large trees and that its estimates may not be proportionate to the value of a property or to what would be paid for a tree. It says studies estimate trees may account for up to 15 per cent of a residential property's value.