Suppose there is a disease certain to impact exactly 5 of a population and that each member of the population is equally likely become infected Treatment for individuals who are infected costs 32 000 Assume in this scenario that the necessary treatment for the disease is the only healthcare cost faced by this population to pay the expected cost of healthcare with The expected cost of healthcare is If members of the population do not prefer certainty rather than take on the 5 risk of having to pay the full cost of the treatment they are risk averse