Question: Suppose the true model for the latent variable is y i = x0 ui . 2.a. We normalize the coefficient of the first covariate x1

Suppose the true model for the latent variable is y i = x0 ui . 2.a. We normalize the coefficient of the first covariate x1 to have absolute value equal to 1. Why do we need a normalization? and why not normalize the algebraic value of this coefficient to be 1

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