Two-Stage DEA: An Application to Major League Baseball
01 Apr 2003-Journal of Productivity Analysis (Kluwer Academic Publishers)-Vol. 19, Iss: 2, pp 227-249
TL;DR: In this article, the authors use DEA to model DMUs that produce in two stages, with output from the first stage becoming input to the second stage, and apply the model to Major League Baseball, demonstrating its advantages over a standard DEA model.
Abstract: We show how to use DEA to model DMUs that produce in two stages, with output from the first stage becoming input to the second stage. Our model allows for any orientation or scale assumption. We apply the model to Major League Baseball, demonstrating its advantages over a standard DEA model. Our model detects inefficiencies that standard DEA models miss, and it can allow for resource consumption that the standard DEA model counts towards inefficiency. Additionally, our model distinguishes inefficiency in the first stage from that in the second stage, allowing managers to target inefficient stages of the production process.
Citations
More filters
TL;DR: This research presents a novel probabilistic procedure that allows for direct measurement of the response of the immune system to earthquake-triggered landsliding.
Abstract: The performances of different types of banks may vary due to heterogeneous technology, which can be examined by metafrontier analysis. However, the metafrontier constructed in most existing literature is concave, resulting in a biased estimation of efficiency. Based on 93 Chinese commercial banks over the period of 2005-2016, we first evaluate the banking efficiency by using the proposed data envelopment analysis (DEA) model, NCMeta-US-NSBM, which simultaneously incorporates a non-concave metafrontier technique, undesirable outputs, and super efficiency into a network slacks-based measure (NSBM) model. Subsequently, the evolution of banking efficiency during the study period is investigated on the basis of the Dagum Gini index and kernel density estimation methods. The main empirical results show the following. 1) There exists significant disparity/heterogeneity in banking efficiency for overall efficiency, productivity efficiency, and profitability efficiency. 2) The results of the technology gap ratio (TGR) and the evaluation of stated-owned banks (SOB), joint-stock banks (JSB), and city commercial banks (CCB) in the productivity stage are higher than those in the profitability stage, indicating that most of the banks have a large space for improvement, especially for SOB and JSB in the profitability stage. 3) The major contribution of the overall difference of banking efficiency in China is the intensity of the transvariation. 4) Although the kernel density estimations for different efficiency scores have similar distributions in corresponding years, the multilevel differentiation phenomenon of banking efficiency may appear after 2008.
17 citations
TL;DR: In this paper, the authors employ a two-stage data envelopment analysis model with an additive efficiency decomposition approach to measure the profitability and marketability of 22 Taiwanese cultural and creative companies.
Abstract: The cultural and creative industries (CCIs) in Taiwan have gradually contributed to the national economy under the impetus of government policies. We employ a two‐stage data envelopment analysis model with an additive efficiency decomposition approach to measure the profitability and marketability of 22 Taiwanese cultural and creative companies. Furthermore, we employ the network‐based ranking approach to identify benchmark inputs/outputs, and the strengths and weakness of each company. Our empirical results show that the profitability of the cultural and creative companies is better than their marketability. Companies in the industries of publishing, creative life, popular music, and cultural content averagely perform better than those in the other three types of CCIs in terms of profitability. Companies in the creative life industry are on average more efficient than those in the other five types of CCIs in terms of marketability. The profitability/marketability matrix of cultural and creative companies is also presented.
17 citations
Cites background from "Two-Stage DEA: An Application to Ma..."
...…scholars began to adopt two-stage production procedures for measuring operating performance in various industries (Seiford & Zhu, 1999; Zhu, 2000; Luo, 2003; Sexton & Lewis, 2003; Chen & Zhu, 2004; Kao & Hwang, 2008; Lu & Hung, 2011), including the CCI (for an example, Chang, Lee, & Park, 2017)....
[...]
TL;DR: In this paper, the authors adopted and extended the data envelopment analysis model of Seiford and Zhu (1999) to investigate the R&D efficiency and marketability of Taiwan's IC•design firms.
Abstract: Summary This article adopts and extends the data envelopment analysis model of Seiford and Zhu (1999) to investigate the R&D efficiency and marketability of Taiwan's IC‐design firms. Cluster analysis is used to study the relationship between invention efficiency, marketability, and firm characteristic variables. Results show that invention efficiency and R&D marketability are 0.6 and 0.4, respectively. It is not desirable that firms often ignore marketability in the R&D process. Cluster analysis is used to divide firm population into high‐ and low‐efficiency segments in order to determine the relationships between invention efficiency, marketability, and environment variables. Results show that the number of employees, employee bonuses, and firm age are positively correlated to invention efficiency and marketability. These results may help guide the operational and managerial policies of IC‐design firms.
17 citations
Cites methods from "Two-Stage DEA: An Application to Ma..."
...This study applies a similar framework (see Färe and Whittaker, 1995; Färe and Grosskopf, 1996, 2000; Zhu, 2000; Seiford and Zhu, 1999; Sexton and Lewis, 2003; Luo, 2003) to deal with the two-stage DEA model....
[...]
TL;DR: In this paper, a bi-level DEA model was proposed to evaluate the performance of a bank chain using Stackelberg-game relationships, and the results derived from this model can provide valuable insights and detailed information for managers.
Abstract: One of the most complicated decision making problems for managers is the evaluation of bank performance, which involves various criteria. There are many studies about bank efficiency evaluation by network DEA in the literature review. These studies do not focus on multi-level network. Wu (Eur J Oper Res 207:856–864, 2010) proposed a bi-level structure for cost efficiency at the first time. In this model, multi-level programming and cost efficiency were used. He used a nonlinear programming to solve the model. In this paper, we have focused on multi-level structure and proposed a bi-level DEA model. We then used a liner programming to solve our model. In other hand, we significantly improved the way to achieve the optimum solution in comparison with the work by Wu (2010) by converting the NP-hard nonlinear programing into a mixed integer linear programming. This study uses a bi-level programming data envelopment analysis model that embodies internal structure with Stackelberg-game relationships to evaluate the performance of banking chain. The perspective of decentralized decisions is taken in this paper to cope with complex interactions in banking chain. The results derived from bi-level programming DEA can provide valuable insights and detailed information for managers to help them evaluate the performance of the banking chain as a whole using Stackelberg-game relationships. Finally, this model was applied in the Iranian bank to evaluate cost efficiency.
16 citations
Cites background from "Two-Stage DEA: An Application to Ma..."
...Bi-level decision making or bi-level programming techniques, first introduced by Von Stackelberg (1952), have been developed for mainly solving decentralized decision process with decision makers in a hierarchical organization....
[...]
...Bi-level programming which is motivated by Von Stackelberg’s game theory (1952) refers to situations where there are two decision makers in an organization which are inter-connected in a hierarchical structure....
[...]
...Sexton and Lewis (2003) proposed a two-stage process for evaluating Major League Baseball performance....
[...]
Journal Article•
TL;DR: In this paper, a model is presented that is able to evaluate the performance of the supply chain by a network data envelopment analysis model and by using the financial, intellectual capital (knowledge base), collaboration and responsiveness factors.
Abstract: Having a comprehensive evaluation model with reliable data is useful to improve performance of supply chain. In this paper, according to the nature of supply chain, a model is presented that able to evaluate the performance of the supply chain by a network data envelopment analysis model and by using the financial, intellectual capital (knowledge base), collaboration and responsiveness factors of the supply chain. At the first step, indicators were determined and explained by explanatory Factor Analysis. Then, Network Data Envelopment Analysis (NDEA) model with variable returns to scale was used. This paper is the result of research related to supply chain of pharmaceutical companies in Tehran Stock Exchange and 115 experts and senior executives have been questioned as sample. The results showed that responsiveness latent variable had the highest correlation with supply chain performance and collaborative, financial and intellectual capital (knowledge base) latent variables were respectively after that. 12 of the 28 supply chains which were studied obtained 1 as the highest performance rate and the lowest observed performance was 0.81.
16 citations
Cites background from "Two-Stage DEA: An Application to Ma..."
...Other examples include the impact of information technology used on bank branch performance [9], two stage Major League Baseball performance [47], health care application and many others....
[...]
References
More filters
TL;DR: In this paper, a non-parametric productivity measure that explicitly incorporates intermediate products is proposed, which is based on the Productivity Index (PII) and employs a nonparametric approach to measure productivity.
462 citations
TL;DR: A nonparametric, linear programming, frontier procedure for obtaining a measure of managerial efficiency that controls for exogenous features of the operating environment is introduced.
Abstract: The ability of a production unit to transform inputs into outputs is influenced by its technical efficiency and external operating environment. This paper introduces a nonparametric, linear programming, frontier procedure for obtaining a measure of managerial efficiency that controls for exogenous features of the operating environment. The approach also provides statistical tests of the effects of external conditions on the efficient use of each individual input (for an input oriented model) or for each individual output (for an output oriented model). The procedure is illustrated for a sample of nursing homes.
441 citations
"Two-Stage DEA: An Application to Ma..." refers methods in this paper
...Sexton and Silkman (2000) and Fried et al. (1999) present similar but distinct approaches to dealing with site characteristics in standard DEA models....
[...]
Posted Content•
TL;DR: In this article, the authors introduce a frontier model for productivity measurement that explicitly recognizes that some inputs are produced and consumed within the production technology, where intermediate inputs may also be final output.
Abstract: The purpose of this paper is to introduce a frontier model for productivity measurement that explicitly recognizes that some inputs are produced and consumed within the production technology. Here we differ from Koopmans (1951) by assuming that the intermediate inputs may also be final output. This assumption is in line with current international trade theory, where intermediate inputs are tradable. Our model consists of two production units that are interconnected in a network to form a production technology. The productivity measure employed here is the so-called Malmquist productivity index. This index consists of ratios of distance functions. Here these distance functions are defined on the network technology and they are computed using linear programming techniques.
439 citations
TL;DR: It is found that the decomposition of production into subproduction processes reduces the dimensions of problem specification, with the effect that a larger number of variables may be usefully included in the model.
Abstract: Agricultural production is often characterised by multiple inputs and multiple outputs to multiple production processes. Where an output from one process is used as an input to another, this output is called an intermediate product. This is a common situation when a farm produces both crops and livestock. The analysis of production efficiency is important for the evaluation of agricultural policy, but until recently, no methods have explicitly included intermediate products. This study applies a non-parametric technique of efficiency measurement which includes intermediate products. The data set is a sample of dairy farms drawn using a complex survey design. The use of non-parametric efficiency measurement and the subsequent application of bootstrapping and kernel density estimation to the results allow inferences to be drawn concerning the whole population from which the sample was drawn. We find that the decomposition of production into subproduction processes reduces the dimensions of problem specification, with the effect that a larger number of variables may be usefully included in the model.
145 citations