Question: Consider the model Q=B+B,P. + BY + u demand function supply function Q = a +P + S + u Estimate this model by 2SLS,

Consider the model Q=B+B,P. + BY + u demand function supply function Q = a +P + S + u Estimate this model by 2SLS, instrumental variable, and indirect least squares methods using the data in Table 9.2 (transform all variables to logs). Would you get different results using the three methods? How would you choose the appropriate normalization (with respect to Qor P.)? Does normalization matter in this model?

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