GMAT Essays (AWA)

PROMPT:
"Studies suggest that an average coffee drinker's consumption of coffee increases with age, from age 10 through age
60. Even after age 60, coffee consumption remains high. The average cola drinker's consumption of cola, however,
declines with increasing age. Both of these trends have remained stable for the past 40 years. Given that the number
of older adults will significantly increase as the population ages over the next 20 years, it follows that the demand for
coffee will increase and the demand for cola will decrease during this period. We should, therefore, consider
transferring our investments from Cola Loca to Early Bird Coffee."

RESPONSE:
The argument presented concludes that the author's investments should be transferred from Cola Loca to Early Bird Coffee. The conclusion depends on evidence that coffee consumption grows with a person's age while cola consumption decreases and because the population will age over the next 20 years, more people will consume coffee. The reasoning in the argument is flawed. First, the argument assumes that the birth rate will continue to be stable or possibly even decrease over the next 20 years. Second, the argument does not consider any information regarding the health effects of consuming coffee or cola. Third, the argument assumes that the study is representative of the markets in which Cola Loca and Early Bird Coffee compete.

The first flaw in the argument is that the author assumes a steady birth rate or possibly even a decreasing birth rate. If the birth rate within the georgraphy the author is studying actually increases over the next 20 years, then the investment may turn out to be a bad. An increasing birth rate suggests more cola drinkers in the future and can help stabilize or even improve Cola Loca's revenues over the 20 year period. The aging population may still prefer coffee as they age, but there will be an influx of younger people to consume cola over the same period.

The second flaw is that the author does not consider any health information related to the consumption of coffee or cola. The author assumes that no new information regarding the health effects of consuming coffee or cola will be discovered over the next 20 years. If, for instance, information is discovered that suggests consuming coffee is bad for people or that consuming cola is good for people, then the investment strategy may be flawed. The author could have presented data - along with the demographics of the drinker's in the study - regarding the health effects of consuming coffee and cola that have been discovered in the past 40 years. If the health effects over the past 40 years have been unchanged, then a reader can reasonably assume that the health effecst will not change in the future.

The third flaw in the argument is that the author assumes that the study is representative of the market in which both Cola Loca and Early Bird Coffee compete. If the study only includes data of a small subset of the market, then the study may not be a good indicator of current or future trends in coffee or cola consumption. The author could have strengthened the argument by providing data regarding the study parameters that show the studies are representative of the market in which both Cola Loca and Early Bird Coffee compete.

As stated above, the reasoning in the author's argument is flawed. First, the author assumes that there will be no changes in the birth rates over the next 20 years. Second, the author does not present any data regarding the health effects of consuming cola or coffee and assumes that no new information will be discovered about the health effects over the next 20 years. Third, the author assumes that the study is representative of the marktes in which both Cola Loca and Early Bird Coffee compete. Providing more information regarding these flaws and assumptions could strengthen the author's arguement.