Health, Wealth, and Fairness

How much health should we have and how should it be distributed? This paper studies how to define social objectives for the allocation of health and income in a setting where individuals may differ in their preferences about health and consumption, earning ability, and health disposition. It is shown, on the basis of three simple ethical principles, that a reasonable social objective is to apply the maximin criterion to “full‐health equivalent” incomes. An application to the choice of the optimal health policy illustrates how this social objective may be used.