Looking for feedback on Argument analysis - Please help!

[gursharankang]

ESSAY QUESTION:
The following appeared in the personal finance section of a popular magazine:

"The average price of an acre of land in the United States is now 50 times what it was in 1970, and nearly 200 times what it was in 1920. The nation’s population is projected to keep increasing, even as the amount of land remains constant. Therefore, people who are approaching retirement should invest heavily in real estate in order to ensure their financial security."

Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.

RESPONSE:
There are several assumptions used in this argument and the most prominent is an assumption that real estate prices are directly proportional to inrease in population. There are some disconnects between the premises used and the conclusion of the argument.

Assumption is that real estate prices has been increasing proportionally to the increase in population. What if we learn that the growth in real estate prices per acre has slowed down extensively. If we compare growth rates from 1920 to 1970, we can see a decline from 200% to 50% and the forecasted rate of growth for the next few years is merely 2-3%. There could also be speculations that the real estate prices are highly inflated and becuase of the current financial recession, we will likely see real estate crises in the next few years. In order to understand real estate growth projections, we need detailed information on the factors that are driving these prices and an estimate on the growth rate data for the next few years.

Statement that people who are approaching their retirement should heavily invest in real estate assumes that the return on investment will last long enough to pay off in a long run. For someone retiring in the next 5 years and expecting to invest in areas where return on investment will be enough for the another 20 years after retirement will be considering steady returns for the next 25 or so years. If we learn that the forecasted numbers are only based on short term returns then this investment could only be beneficiary to people investing for a short term time period.

Argument also assumes that the amount of land stays the same. If we learn that urban areas are quickly expanding and most of the industries are moving out of the metropolitan areas due to skyrocketing prices. This will likely slow down prices in the urban areas and availability of more land spaces will adversely impact overall real estate prices. Also that most of the growth rate is attributed to only handful of states where saturation is likely to be reached in couple of years.

In order to strengthen or weeken this argument, we need to understand forcasted growth rate of real estate market for a 20-30 years of time period to evaluate if the return on investement will suit people who are retiring in next 5 or so years. We also need to understand if real estate prices are solely driven by population and what population rates are expected from the next 20-30 years. If there are other factors that affect real estate market then those factors should be considered to judge the viability of an argument.

[StaceyKoprince]

Hi, thanks for posting your essays! Just an FYI that instructors don't grade or give feedback on essays (see the forum guidelines for details).

But I certainly hope other community members respond. Also, if you're in our class, you'll have an opportunity to get essays graded and get written feedback during the course (after class 6). Finally, you can get essays graded by GMAT Write (the official essay grading service from the makers of the exam) - they'll both grade the essays and provide feedback as to how to improve (for a fee). For details and pricing, go to www.mba.com and search for GMAT Write.

[subhashisbasu]

I think it should be a 6. Incase you have already appeared in GMAT can you share your score.