GMAT : Analysis of An Argument

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An Argument

30. The following appeared in a newspaper story giving advice about investments.

As overall life expectancy continues to rise, the population of our country is growing increasingly older. For example, over twenty percent of the residents of one of our more populated regions are now at least 65 years old and occupancy rates at resort hotels in that region declined significantly during the past six months. Because of these two related trends, a prudent investor would be well advised to sell interest in hotels and invest in hospitals and nursing homes instead.


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 underline 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 in conclusion.


In this argument prudent investors are advised to stop investing in hotels and invest instead in hospitals and nursing homes. The author cites two related trends - an aging population and a decline in hotel occupancy - as grounds for this advice. To illustrate these trends, the author refers to another region of the country where 20 percent of the population is over 65 years old and where occupancy rates in resort hotels have declined significantly during the past six months.

This argument is unconvincing in a couple of important respects.

In the first place, the author provides no evidence to support the claim that the population as a whole is aging and that the hotel occupancy rate in general is declining. The example cited, while suggestive of these trends, is insufficient to warrant their truth because there is no reason to believe that data drawn from this unnamed region is representative of the entire country.

For example, if the region from which the data was gathered was Florida, it would clearly be unrepresentative. The reason for this is obvious. Florida is populated by a disproportionate number of retired people over 65 years old and is a very popular vacation destination during the winter months. Moreover, resort hotel occupancy in Florida typically declines significantly during the summer months.

In the second place, the author has provided no evidence to support the claim that the decline in hotel occupancy is related to the aging of the population. The author appears to believe that the decrease in occupancy rates at resort hotels is somehow caused by the increase in the number of people over age 65. However, the example cited by the author establishes only that these two trends are sequential or simultaneous. It does not establish that the decline in hotel occupancy is only due to an increase in the number of people over the age of 65.

In conclusion, the author's investment advice is not based on sound reasoning. To strengthen the conclusion, the author must show that the trends were not restricted to a particular region of the country. The author must also show that the cause of the decline in hotel occupancy is the increase in the number of people over 65.

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