Using Cost-Effectiveness Analysis (CEA) requires that decision makers adopt a pre-determined cutoff (K) that becomes the maximum willingness to pay (WTP) for health care interventions. Although this approach has been shown to follow directly from maximization of a single person’s expected utility (Garber and Phelps, 1997), economic theory has not previously provided guidance about the level of K either in absolute terms or relative to income (Y). The optimal value of K/Y is proven to be the inverse of the income elasticity of utility itself – E_UY