Question: What is meant by the phrase: "The estimator is invariant to normalization"? Do any problems arise if an estimator is not invariant to normalization? Which of the following estimation methods gives estimators that are invariant to normalization?
(a) Indirect least squares.
(b) 2SLS.
(c) Instrumental variable methods.
(d) LIML Explain how you would choose the appropriate normalization (with respect to quantity or price) in a demand and supply model.