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Based on definitions from Linguee and de.wiktionary.org, both "schätzen" and "zu schätzen wissen" seem to be used to mean "to appreciate". Examples from Linguee:

  1. Kunden schätzen guten Service und Zuverlässigkeit.
  2. Ich weiß deinen Rat zu schätzen.
  3. Der Chef weiß meinen Einsatz zu schätzen.

My guess is that "zu schätzen wissen" implies that someone has experience in the consequences of not appreciating advice, commitment etc in the past, and now know to appreciate it.

I would like to know when "zu schätzen wissen" is more appropriate than "schätzen".

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You are right in your deconstruction but in everyday language, such a difference is not made.

Der Chef schätzt meinen Einsatz.

Der Chef weiß meinen Einsatz zu schätzen.

express the same thing, you tell someone your boss appreciates your engagement. The latter phrase is just more distant and vague and generally preferred. The first phrase sounds boasting.

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    Moreover, it is a question of style. Depending on your type of text or the situation where you use it, the one or the other might be more appropriate. ... weiß meinen Einsatz zu schätzen is good in formal texts (such as in a job reference or in parliamentary debate) but would sound stiff and wooden in everyday oral communication with friends and colleagues. – Christian Geiselmann Jan 27 '18 at 12:50
  • Wouldn't say it sounds boasting. It's either formal language or not, both okay. – Martin Kremers Jan 27 '18 at 12:55
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»zu schätzen wissen« is more often used in cases where also a proof of the appreciation is reported or at least assumed.

  • Kunden wissen guten Service und Zuverlässigkeit zu schätzen, (proof:) denn sie bedanken sich mit Treue.
  • Ich weiß deinen Rat zu schätzen (proof:) und werde ihn befolgen.
  • Der Chef weiß meinen Einsatz zu schätzen (proof:) und zahlt mir demnächst mehr Gehalt.

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