PZ consider how to determine the socially optimal level of expenditure on reducing
mortality risks, and argue that each individual’s WTP for his risk reduction must be corrected
for his own risk and his own wealth. To do this, PZ place individuals behind a veil of
ignorance that prevents them from perceiving their risk type and wealth level. Behind the
veil, individuals are assumed to have an equal subjective probability of being each person,
and so, when they maximise expected utility (EU), they also maximise the average cardinal
utility of those in society behind the veil.2 PZ show that EU maximisation requires that
the cost of a marginal decrease in risk is set equal to societal WTP for that same marginal
decrease. The first-order conditions imply that each marginal risk reduction is valued equally
where wealth is constant across society. Where wealth differs, the optimal reduction varies
negatively with wealth, such that society places a greater weight on risk reductions for
wealthy individuals. Behind PZ’s veil, society makes decisions by maximising the average
of cardinal utilities so, if good health improves the ability to enjoy wealth, then individuals
with higher wealth gain a greater increase in utility from a given health improvement. Other
factors being equal, this suggests that society is willing to pay a higher amount to save the
life of a wealthy individual.