Many people are drawn to the Prioritarian view that "Benefiting people matters more the worse off these people are." (Parfit 1997, 213) Importantly, this is not just the (utilitarian-compatible) idea that many goods have diminishing marginal value, so that better-off people are likely to benefit less than worse-off people from a certain amount of material goods. Even after accounting for all that, the idea goes, the interests of the worse-off just matter more; we should even give a lesser benefit to the worst off rather than a (genuinely) slightly greater benefit to someone who is already well-off.
This view always struck me as deeply misguided. By effectively attributing diminishing marginal value to welfare itself, you can end up implying that even considering just a single individual, it might be "better" to do what is worse for him (e.g. giving him a smaller benefit at a time when his quality of life is lower, rather than a greater benefit at a different time).
But there is a closely related view that is more theoretically cogent. Rather than attributing diminishing marginal value to welfare itself, you attribute it to the basic goods that contribute to one's welfare (happiness, etc.). This goes beyond the familiar idea that material resources have diminishing instrumental value, say for making you happy. We are now introducing a kind of non-instrumental diminishing value, by saying that happiness itself makes more of a difference to your welfare the less of it you have.
This view has similar practical implications to prioritarianism. If given a fixed amount of a basic good to distribute (a fixed-size happiness boost, say), it is better, all else equal, to give it to the worst off individual. But it has significant theoretical benefits. Rather than abandoning moral equality and saying that equal-or-lesser interests of the worst off just matter more, we maintain the equal consideration of interests and instead affirm that we are able to make more of a difference to the interests of the worse off (even with an equally sized happiness boost). We prioritize helping them, not because they matter more, but because we are able to benefit them more.
And, of course, we avoid the near-incoherence of attributing diminishing marginal value to welfare itself.
Can you see any reason to prefer the traditional prioritarian view (on which welfare has DMV) over this utilitarian-compatible competitor (on which welfare-contributors have DMV)? Has anyone formulated this latter view before?