Reply to post by Scott Cullen, on October 23, 1998 at 13:56:58:

I'll yield to your definitions of terms, although I still hold my opinion in the esoteric context of the discussion. I plead guilty of misusing "inflation", when I should have used "interest".

I do not understand how TF can be considered a depreciated replacement cost approach. It has nothing to do with replacement, except as qa basis for the numbers, the same as CCR. The value is still extrapolated- by that factor which I am not allowed to call "natural interest growth" .

My exercise in comparison of TF and CCR was only intended to help me (and perhaps other) to better understand the relationships between the methods. Obviously, any formulae can be manipulated to show whatever you want. Not intended to do anything more than show how compounding compares.

I think your discussions are quite helpful in understanding this complex subject.

Reply to post by Russ Carlson, on October 23, 1998 at 20:05:09:

Russ, your last comment has hit on the mark. It is a complex topic. Once the tree appraiser starts to consider INTEREST, INFLATION and COMPOUNDING he/she moves from the familar area of arboriculture/horticulture into the terrain of finance. It is instructive that all the forest economics texts I looked at to research the issue of compounding devote an entire chapter to INTEREST and INTEREST RATES and at least parts of other chapters to INFLATION and the TIME VALUE OF MONEY. How can the tree appraiser can meaningfully apply these concepts based on a few paragraphs in the 8th edition? I've come up with about 30 pages of background concepts just to introduce a meaninful critique of CCR.

As to characterizing TF as a depreciated replacement cost approach to value see Tree Appraisal: What is the Trunk Formula Method in ASCA newsletter Oct.'97. I'd be happy to answer any questions?

We must be very careful in our role as professional appraisers/expert witnesses. Our role is to observe and analyze facts and report our conclusions to the trier of fact in a manner that helps it understand those facts. If we enter the exercise with preconceived notions of what is "reasonable" or "palatable" or "saleable," if we enter the exercise thinking about appearing more "right" than the opposing expert who may also have those preconceived notions, are we really being independent and objective? Are our competence, credentials and expertise really just window dressing to get us admitted as experts? We must rely on our technical expertise to observe the facts and we must present them according to the well defined and understood descriptive models we use. We must not manipulate those models to simply appear more reasonable. The facts, as much as possible, should be allowed to speak for themselves without our interpretation.

Tree appraisers have been hampered by poorly articulated theoretical foundations for the descriptive models and have in good faith attempted to fill the void. Unfortuneately, most are not trained in the economic/financial concepts which are really involved.

You've made a great contribution by providing this discussion forum. It's starting to get to core issues rather than measurement techniques or philosophical debates about what society's opinions should be.

Reply to post by Scott Cullen, on October 23, 1998 at 21:36:07:

I agree that the thread is just getting interesting. Great fun to see such a high level of esoteric debate on the TF approach. Keep the thread going.

Julian

Reply to post by Julian Dunster, on October 24, 1998 at 08:08:43:

Yes we are getting into a really meaningful level of discussion. Let's keep it going. I suspect there are many threads, however, and we have gotten far off Tina's initial Location inquiry. It might be easier for all to follow if we start new threads for new topics.

I would like to suggest that participants become familiar with sources. If the 8th edition is your primary guide, start by looking at its references. Get a real estate appraisal handbook, since licensing is required in every state the bookstores and libraries all have test prep books. Foresters: dig out that freshman forest economics/management/valuation text you haven't looked at in 20 years. Look for patterns and concensus, what is generally accepted. Look beyond individual opinions like "often used" or "universally accepted" for real cited sources. If you voice an opinion, give it weight by citing your sources. We as a group need to move beyond endlessly variable individual/intuitive interpretations to a comprehensive model or framework with a soundly reasoned and thoroughly supported academic/theoretical foundation.

Julien, after posting my message to russ about terminology, I was interested to read par. 1 p. xiii of the Introduction to your Dic. Nat. Res. Mgmt. Take a look guys.