OBJECTIVE: The objective of the health system is to achieve an efficient and equitable allocation of scarce health resources. In this study, a particular social welfare function was used to decide the optimal allocation of resources between smoking cessation methods (medical advice, nicotine gum and nicotine patches) for smokers and 20-80 mg/day lovastatin (HMG-CoA reductase inhibitor) for individuals with hypercholesterolemia. METHODS: Parameter epsilon determining the exact form of the social welfare function is >0 when society has aversion to inequality in the distribution of health gains between two patient groups, while it is equal to 0 when there is no aversion. This parameter was determined using a questionnaire to assess preferences concerning the efficiency-equity trade-off in a group of health managers. Based on these preferences, a higher priority should be given to the preventive intervention associated with a value of epsilon consistent with that from the social welfare function. RESULTS: A value of epsilon=1.6 was obtained for the social welfare function. Values of epsilon obtained for different preventive interventions were 2.9-1.8 for medical advice for smoking cessation and 20-80 mg/day lovastatin, 0.9-0.15 for nicotine gum and 20-80 mg/day lovastatin, and 0 for nicotine patch for smoking cessation and 20-80 mg/day lovastatin. The highest value of epsilon was obtained for the intervention using medical advice for smoking cessation and 20 mg/day lovastatin for hypercholesterolemia, with 2.9 in men and 2.4 in women. A higher priority should be given to the intervention using medical advice for smoking cessation and 20-80 mg/day lovastatin for hypercholesterolemia than to interventions using nicotine substitution therapies and 20-80 mg/day lovastatin. CONCLUSION: Lovastatin treatment of hypercholesterolemia should have a higher priority than nicotine substitution therapies for smoking cessation based on cost-effectiveness and the social welfare function.