The following appeared as part of the business plan of an investment and financial consulting firm:
“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.”
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 counter examples 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.
My Answer:
The argument claims that the demand for coffee will increase and the demand for cola will decrease over the next 20 years owing to the fact that studies have suggested an increasing trend for coffee consumption and decreasing trend for cola consumption with age for the respective beverage drinkers. Stated in this way, the argument provides a distorted view by taking different user base and not taking the quantity of the starting point of the beverage into account.
Firstly, the argument could have been much clearer if it stated the exact number of coffee drinkers when compared to cola drinkers. If there are only a few coffee drinkers in the world when compared to cola drinkers even if their consumption of coffee increases with age, they remain a smaller set than cola drinkers and the overall market will be determined by the number of drinkers multiplied by the average consumption. Only after this calculation should a business decision be made.
Secondly, the argument does not define a starting point of the coffee drinkers as compared to the cola drinkers. Young kids and adults have cola in large amounts which is bound to decline with age whereas coffee drinkers begin gradually which leads the trend to go upwards. This does not imply that cola is being consumed less than coffee, it simply means cola is being consumed less than the cola consumed at the start of the period.
Thirdly, the argument assumes that the population would be aging in the next 20 years and not distributing this into cohorts like India and China where birth rates exceed mortality rates versus a Japan where the opposite is true. Not taking edge cases like a pandemic affecting the elderly is not helping the case as well.
All in all, this argument could be made convincing after another layer of research and with full knowledge of contributing factors. Without the above information, the argument remains unsubstantiated and open to debate.