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Econometrics

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Which Variable Was Rescaled?

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Suppose your friend was using the Simple Linear Regression Model:

$$y_i = \beta_0 + \beta_1 x_i + u_i$$

...which she estimated via OLS. Both the $y_i$ and $x_i$ variables were measured in meters. Her estimate for the slope term was $-238.9$.

She then decided to rescale one of the variables into kilometers instead of meters -- but you don't know which one. All you know is her rescaled estimate for the slope term is $-0.2389$.

Which variable did she rescale?

A

$y_i$

B

$x_i$

C

Not enough information to answer