You ask a very valid question. Here is the difference in the usage of “rather than” and “instead of”.“Rather than”
is generally used to show the preference for one thing over the other. Commonly, we see this expression used in sentences that pertains to parallelism (for example in the original sentence).
a. I will buy the blue tie rather than the red.
b. She decided to stay home rather than going out in the snow.“Instead of”
is used to denote a substitute for the other. Also use of verbs is considered incorrect after “instead of”.
a. I bought the blue tie instead of the red.
b. She ate popcorn instead of marshmallows.
In the original sentence, use of “instead of” is incorrect because here one quality of potato is not a substitute for another quality of the vegetable. The sentence talks about a wrong notion prevalent among people. People believe in one quality of potato rather than the other quality of it. The intended meaning of the sentence makes the use of “instead of” incorrect here.
Hope this help.
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