The stimulus has the economists proposing an argument that buying lotteries tickets is dumb. Why? Because on average, you pay in way more than you take out.
The author argues that the economists are wrong. What's his argument?
He says that buying lottery tickets are analogous to buying insurance (tickets, if you will). How are they similar? Because on average, you pay in way more than you take out.
Okay, that's all well and good. Let's remember that this is an argument by analogy so we need to show where insurance isn't like the lottery.
What are you buying with insurance? You're paying more on average than you take out of it. So what are you buying? You're buying *insurance*. You're buying protection from risk, that if by some terrible stroke of misfortune, you should get hit by a car, you'll be financially covered.
What are you buying with lotteries? You're buying a chance to win some large amount of money.
Since we know that this is an argument by analogy, you have to point out where this argument isn't analogous. That's what (E) does. (E) tells that people value protection from risk way more than they value the chance to win a lot of cash. Well, if that's true, then the author's analogy doesn't work so well anymore.
(D) is the attractive answer choice. But it's wrong because (1) we don't care about the "grand" prize and (2) simply knowing odds doesn't matter much - we also have to know the amount to be weighed against those odds.