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.
YOUR RESPONSE:
In the argument, the author states that to ensure financial security in future, people should invest heavily in real estate now. The author specially advises to the people on verge of retirement to take this action. He cites increasing land prices and nation's population behind his reasoning to invest in real estate. However, the author's reasoning has several flaws.
Firstly, the author does not take into account inflation rate while comparing current land prices to those of 1970 and 1920. It is possible that the value of currency might have gone down in the time-period taken into account and thus the amount of money required to buy a certain piece of land has increased. Along with it, it is also possible that people's income might have increased at a rate more than that of increase in land prices. So, the relative purchasing power of customers today will be higher as compared to those of 1970 or 1920.
Secondly, the author advises people who are on the verge of retirement to invest in real estate. He does not provide any data to substantiate his claim that return from real estate investment will be highest. It is possible that other financial instruments such as stocks, bonds, mutual funds, commodity investments etc. may provide higher return than that of real estate.
Thirdly,the author does not take into account the modern advancements in the limited land utilization. It is possible that now the builders might be interested in building more floors on same land than they used to make in 1970 or in 1920 thus accommodating more people in the same area of land. To do so is possible with the advancement in civil construction technologies.
To strengthen the argument,the author must consider current inflation rate, average purchasing power of people today as compared to that in 1970 or in 1920 to make sure that current purchasing power of people have gone down. Further, the author also needs to furnish details that no other financial instrument can provide as high return as real estate. He should also substantiate his claim by telling that no technological breakthrough has changed the way the same area of land is utilized to accommodate more number of people.
So, the author's argument is not fully convincing. He needs to provide details on some key issues to better comprehend the passage.
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.
YOUR RESPONSE:
In the argument, the author states that to ensure financial security in future, people should invest heavily in real estate now. The author specially advises to the people on verge of retirement to take this action. He cites increasing land prices and nation's population behind his reasoning to invest in real estate. However, the author's reasoning has several flaws.
Firstly, the author does not take into account inflation rate while comparing current land prices to those of 1970 and 1920. It is possible that the value of currency might have gone down in the time-period taken into account and thus the amount of money required to buy a certain piece of land has increased. Along with it, it is also possible that people's income might have increased at a rate more than that of increase in land prices. So, the relative purchasing power of customers today will be higher as compared to those of 1970 or 1920.
Secondly, the author advises people who are on the verge of retirement to invest in real estate. He does not provide any data to substantiate his claim that return from real estate investment will be highest. It is possible that other financial instruments such as stocks, bonds, mutual funds, commodity investments etc. may provide higher return than that of real estate.
Thirdly,the author does not take into account the modern advancements in the limited land utilization. It is possible that now the builders might be interested in building more floors on same land than they used to make in 1970 or in 1920 thus accommodating more people in the same area of land. To do so is possible with the advancement in civil construction technologies.
To strengthen the argument,the author must consider current inflation rate, average purchasing power of people today as compared to that in 1970 or in 1920 to make sure that current purchasing power of people have gone down. Further, the author also needs to furnish details that no other financial instrument can provide as high return as real estate. He should also substantiate his claim by telling that no technological breakthrough has changed the way the same area of land is utilized to accommodate more number of people.
So, the author's argument is not fully convincing. He needs to provide details on some key issues to better comprehend the passage.
