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Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
20 Jan 2016, 15:29
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The following appeared in the editorial section of a campus newspaper.
“Because occupancy rates for campus housing fell during the last academic year, so did housing revenues. To solve the problem, campus housing officials should reduce the number of available housing units, thereby increasing the occupancy rates. Also, to keep students from choosing to live off-campus, housing officials
should lower the rents, thereby increasing demand.”
The argument claims that to increase revenue from on-campus housing, the housing officials should reduce the number of housing units, and decrease the rent, thus increasing the demand and hence revenues. The argument is not well-reasoned, because there are some key factors that appear to not have been taken into account.
The argument states that occupancy rates fell last year, and so did the housing revenues. This is a perfectly reasonable observation. The argument states states a two-pronged solution -
reduce the number of available housing units and lower the rents. Reducing the number of housing units available is clearly not going to improve the revenue. This step is an acknowledgement that the situation is beyond remedy, and looks more like lowering the bar to suit a poor jumper.
The hosuing officials should work with numbers to see how much revenue they are losing. They should determine the maximum exact number of students who can potentially be accomodated in the housing units inside the campus, and then establish whether the number of housing units is adequate to house all these students or whether the number is falling short. If the number falls short, it is well and good. After this step, they should try to determine why exactly students seem to prefer housing units outside the campus as opposed to on-campus housing units. One obvious answer could be lower rents outside. If the housing units on-campus have any other shortcomings that are not present in housing units outside - such as functional furniture, better heating, 24 hours running water, better ventilation and the like, then the housing officials will know that they need ot providde these facilities too. This along with rents that are comparable ot rents off-campus would increase the occupancy rates and maximise the revenue from the on-campus housing.
Thus, the argument is flawed because there are leaps to faith made without considering data that can easily be collected.
“Because occupancy rates for campus housing fell during the last academic year, so did housing revenues. To solve the problem, campus housing officials should reduce the number of available housing units, thereby increasing the occupancy rates. Also, to keep students from choosing to live off-campus, housing officials
should lower the rents, thereby increasing demand.”
The argument claims that to increase revenue from on-campus housing, the housing officials should reduce the number of housing units, and decrease the rent, thus increasing the demand and hence revenues. The argument is not well-reasoned, because there are some key factors that appear to not have been taken into account.
The argument states that occupancy rates fell last year, and so did the housing revenues. This is a perfectly reasonable observation. The argument states states a two-pronged solution -
reduce the number of available housing units and lower the rents. Reducing the number of housing units available is clearly not going to improve the revenue. This step is an acknowledgement that the situation is beyond remedy, and looks more like lowering the bar to suit a poor jumper.
The hosuing officials should work with numbers to see how much revenue they are losing. They should determine the maximum exact number of students who can potentially be accomodated in the housing units inside the campus, and then establish whether the number of housing units is adequate to house all these students or whether the number is falling short. If the number falls short, it is well and good. After this step, they should try to determine why exactly students seem to prefer housing units outside the campus as opposed to on-campus housing units. One obvious answer could be lower rents outside. If the housing units on-campus have any other shortcomings that are not present in housing units outside - such as functional furniture, better heating, 24 hours running water, better ventilation and the like, then the housing officials will know that they need ot providde these facilities too. This along with rents that are comparable ot rents off-campus would increase the occupancy rates and maximise the revenue from the on-campus housing.
Thus, the argument is flawed because there are leaps to faith made without considering data that can easily be collected.
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