The letter, dated January 11, 1992, from Paul R. Portney, Vice President and Senior Fellow, to Thomas A. Campbell, General Counsel of the National Oceanic and Atmospheric Administration (NOAA), outlines the final report of the Contingent Valuation Panel (Panel). The Panel, co-chaired by Kenneth Arrow and Robert Solow, and including Edward Leamer, Roy Radner, and Howard Schuman, assesses the reliability of contingent valuation (CV) methodology in measuring passive-use values of natural resources. The Panel concludes that CV studies can provide reliable estimates to serve as a starting point for judicial or administrative determinations of natural resource damages, including lost passive-use value. However, these studies must adhere closely to the guidelines outlined in the report to ensure reliability. The report is structured into sections discussing the introduction, drawbacks of CV, key issues, guidelines, a research agenda, and detailed conclusions. The Panel emphasizes the importance of carefully constructing, administering, and analyzing CV studies to produce useful information for decision-makers. They also recommend further research into the sensitivity of responses to the number and extent of undamaged substitute commodities mentioned in surveys and the presentation of the no-vote option. In their conclusions, the Panel states that CV studies can provide reliable estimates under specific conditions, such as careful informed respondents and conservative choices in the CV instrument. They suggest that hypothetical markets tend to overstate willingness to pay, but conservative designs can offset this bias. The Panel recommends that federal agencies start accumulating standard damage assessments for various scenarios to improve the reliability of CV studies and reduce costs in subsequent damage assessment cases.The letter, dated January 11, 1992, from Paul R. Portney, Vice President and Senior Fellow, to Thomas A. Campbell, General Counsel of the National Oceanic and Atmospheric Administration (NOAA), outlines the final report of the Contingent Valuation Panel (Panel). The Panel, co-chaired by Kenneth Arrow and Robert Solow, and including Edward Leamer, Roy Radner, and Howard Schuman, assesses the reliability of contingent valuation (CV) methodology in measuring passive-use values of natural resources. The Panel concludes that CV studies can provide reliable estimates to serve as a starting point for judicial or administrative determinations of natural resource damages, including lost passive-use value. However, these studies must adhere closely to the guidelines outlined in the report to ensure reliability. The report is structured into sections discussing the introduction, drawbacks of CV, key issues, guidelines, a research agenda, and detailed conclusions. The Panel emphasizes the importance of carefully constructing, administering, and analyzing CV studies to produce useful information for decision-makers. They also recommend further research into the sensitivity of responses to the number and extent of undamaged substitute commodities mentioned in surveys and the presentation of the no-vote option. In their conclusions, the Panel states that CV studies can provide reliable estimates under specific conditions, such as careful informed respondents and conservative choices in the CV instrument. They suggest that hypothetical markets tend to overstate willingness to pay, but conservative designs can offset this bias. The Panel recommends that federal agencies start accumulating standard damage assessments for various scenarios to improve the reliability of CV studies and reduce costs in subsequent damage assessment cases.