'Rather than' v/s 'Instead of'

It is extremely unlikely that the GMAT will ask you to chose between two choices only on the basis of 'rather than' and 'instead of'. Usually there will be some other error as well in one of the options.

Still you should know the difference between the two:

'Rather than' is used to express preference of one thing over another whereas 'instead of' is used to replace one thing with another.

I will have tea rather than coffee.

What you are saying is that you would prefer tea but if tea is not available you will be ok with coffee as well.

I will have tea instead of coffee.

Here you are not just expressing preference but rather you are replacing one option with another; so no coffee, only tea.

Also remember that technically, 'rather than' is a conjunction so it can be followed by anything - noun, phrase, clause - whereas 'instead of' is a preposition so it can be followed only by nouns.

Example

1. I went in the house instead of in the garden.
   
   
2. I went in the house instead of the garden.

In Sentence 1 above, 'instead of' is incorrect because it is followed by the phrase 'in the garden'. Here the correct usage would be 'rather than'

In Sentence 2 'instead of' is correct since it is followed by the noun 'garden'. Note that 'rather than' can also be used in this sentence to replace 'instead of'.


To Sum it Up:

1. Use 'rather than' to show preference or as a conjunction to link nouns, phrases and clauses.
   
   
2. Use 'instead of' to replace one thing with another or as a preposition before nouns.
   
   
3. If confused go with 'rather than'.