Pack of cigarttes and tax - CR

[sd]

I encountered this question on the GMAT PREP1 test and got it wrong -:(

In the year following an eight-cent increase in the federal tax on a pack of cigarettes, sales of cigarettes fell ten percent. In contrast, in the year prior to the tax increase, sales had fallen one percent. The volume of cigarette sales is therefore strongly related to the after-tax price of a pack of cigarettes.

Which of the following, if true, could most strengthen the argument above?

(A) During the second year after the tax increase, cigarette sales increased by a significant amount.
(B) The information available to consumers on the health risks of smoking remained largely unchanged in the period before and after the tax increase.
(C) Most consumers were unaware that the tax on cigarettes was going to increase.
(D) During the year following the cigarette tax increase, many consumers had less income, in inflation-adjusted dollars, than they had had in the previous year.
(E) During the year after the tax increase, there was a greater variety of cigarettes on the markey than there had been during the previous year.

Please explain why answer is (B) and whats wrong with all the remaining choices.

[selva.e]

This is cause and effect reasoning.

cause (X) - the tax imposed
effect (y) - reduce in cigarette sales.

X --> Y

To strengthen, you have to eliminate alternate causes that can lead to Y.
This is done by B, which states that increased awareness did not lead to reduced sales.

[RonPurewal]

This is cause and effect reasoning.

cause (X) - the tax imposed
effect (y) - reduce in cigarette sales.

X --> Y

To strengthen, you have to eliminate alternate causes that can lead to Y.
This is done by B, which states that increased awareness did not lead to reduced sales.

this is an absolutely classic type of problem: it CONFLATES CORRELATION WITH CAUSATION.

it takes a statistical correlation between cigarette tax and cigarette consumption, and postulates that one has a CAUSAL effect on the other. (here, the tax is taken to lead to decreased consumption.)

anything disrupting the CAUSAL relationship between cigarette tax and cigarette consumption --> i.e., any ALTERNATIVE EXPLANATION FOR WHY THE TWO ARE CORRELATED --> will ruin the argument.
therefore, you can STRENGTHEN the argument by DISPENSING with such explanations.

this is what choice (b) does. one possible alternative explanation is that consumers may have become more educated about the dangers of cigarettes, leading them to smoke fewer cigarettes regardless of the tax. this choice eliminates that possibility.

in general, STATEMENTS OF CAUSE AND EFFECT are stronger if OTHER VARIABLES ARE "CONTROLLED" -- i.e., if NO other variables, apart from the variables under control, are allowed to change.
choice (b) keeps one such variable (the amount of information available to consumers) controlled.

[goelmohit2002]

Can someone please tell why E is wrong...

Does it

a) out of scope.
b) Requires extra assumption.
c) or there is some other reason.

[NIKESH_PAHUJA]

@goelmohit2002

E is clearly out of scope.

The argument is concerned with the sale of cigarettes and not variety of cigarettes.

Can someone please tell why E is wrong...

Does it

a) out of scope.
b) Requires extra assumption.
c) or there is some other reason.

[goelmohit2002]

@goelmohit2002

E is clearly out of scope.

The argument is concerned with the sale of cigarettes and not variety of cigarettes.

Can someone please tell why E is wrong...

Does it

a) out of scope.
b) Requires extra assumption.
c) or there is some other reason.

Thanks....

Can someone please once clarify....can't we think this way....

More Variety -> More choice to consumer -> More sales.....

But actually sales decreased(fact given)...

So above expected scenario is not happening...so E actually strengthens the conclusion that indeed cost was the factor ?

Thanks
Mohit

[RonPurewal]

Thanks....

Can someone please once clarify....can't we think this way....

More Variety -> More choice to consumer -> More sales.....

But actually sales decreased(fact given)...

So above expected scenario is not happening...so E actually strengthens the conclusion that indeed cost was the factor ?

Thanks
Mohit

nope.

the only way to strengthen a causation argument, regarding other variables (= anything besides price and sales, in this case) is by CONTROLLING those other variables.

this is a standard and firm principle of statistical research: if there is ANY variation in some variable other than the ones under study (a "confounding variable"), then the connection between correlation and causality is weakened - because it's possible that causality might be attributable to that confounding factor, rather than to the variable(s) under study.

in the case of choice (e), it's just as plausible that the increased variety of cigarettes caused the decrease in sales, for a variety of reasons (perhaps consumers were confused or turned off). this is just as plausible as your scenario.

the only way to phrase choice (e) so that it strengthens the argument would be to say that there is the same degree of variety before and after the tax increase. i.e., experimental control.

[goelmohit2002]

Thanks....

Can someone please once clarify....can't we think this way....

More Variety -> More choice to consumer -> More sales.....

But actually sales decreased(fact given)...

So above expected scenario is not happening...so E actually strengthens the conclusion that indeed cost was the factor ?

Thanks
Mohit

nope.

the only way to strengthen a causation argument, regarding other variables (= anything besides price and sales, in this case) is by CONTROLLING those other variables.

this is a standard and firm principle of statistical research: if there is ANY variation in some variable other than the ones under study (a "confounding variable"), then the connection between correlation and causality is weakened - because it's possible that causality might be attributable to that confounding factor, rather than to the variable(s) under study.

in the case of choice (e), it's just as plausible that the increased variety of cigarettes caused the decrease in sales, for a variety of reasons (perhaps consumers were confused or turned off). this is just as plausible as your scenario.

the only way to phrase choice (e) so that it strengthens the argument would be to say that there is the same degree of variety before and after the tax increase. i.e., experimental control.

Thanks Ron ! Got my mistake....

Basically here I was taking extra assumption.....that variety => increase in sales.....which is no where mentioned in the argument.....and yes as you mentioned variety can lead to decrease in sales too.....basically since no information is given...so effect can be both positive and negative.

Please tell do you concur with my view ?

[RonPurewal]

Thanks Ron ! Got my mistake....

Basically here I was taking extra assumption.....that variety => increase in sales.....which is no where mentioned in the argument.....and yes as you mentioned variety can lead to decrease in sales too.....basically since no information is given...so effect can be both positive and negative.

Please tell do you concur with my view ?

yes.

as soon as you get to "i was making an extra assumption", that answer choice is gone.

[goelmohit2002]

Thanks Ron ! Got my mistake....

Basically here I was taking extra assumption.....that variety => increase in sales.....which is no where mentioned in the argument.....and yes as you mentioned variety can lead to decrease in sales too.....basically since no information is given...so effect can be both positive and negative.

Please tell do you concur with my view ?

yes.

as soon as you get to "i was making an extra assumption", that answer choice is gone.

Thanks Ron !!!

Can you please help resolve similar CR question....

cr-gmat-paper-based-q-t663.html

Not sure why D over there is wrong.

[smilepinks]

Why Choice D is wrong?

Thanks in advance

[goelmohit2002]

Why Choice D is wrong?

Thanks in advance

D weakens.....

it says that there was less money in hands of people to purchase cigarettes....

i.e. inflation increased at higher rate than the salaries of people.

[RonPurewal]

Why Choice D is wrong?

Thanks in advance

this choice actually weakens the argument, because it provides a valid alternative explanation for the decrease in cigarette sales. i.e., cigarette sales may well have decreased because consumers had less money with which to buy them, rather than because of the rise in price.

to STRENGTHEN the argument, you have to STRIKE OUT other reasons, not invoke other reasons!
note that this is exactly what is done in choice (b), the correct answer.

[puneet.sharma]

Why Choice D is wrong?

Thanks in advance

this choice actually weakens the argument, because it provides a valid alternative explanation for the decrease in cigarette sales. i.e., cigarette sales may well have decreased because consumers had less money with which to buy them, rather than because of the rise in price.

to STRENGTHEN the argument, you have to STRIKE OUT other reasons, not invoke other reasons!
note that this is exactly what is done in choice (b), the correct answer.

Thanks for this explanation Ron
you always Rock man........:)

[RonPurewal]

sure.