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.
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Dissertation•
01 Jan 2010
6 citations
Cites background from "Two-Stage DEA: An Application to Ma..."
...…Korhonen and Luptacik (2004), Rheinhard et al. (1999, 2000), Scheel (2001), Gomes and Lins (2008), Lovell et al. (1995), Golany and Roll (1989), Sexton and Lewis (2003), Thanassoulis (1995), Hailu and Veeman (2001), Dyckhoff and Allen (2001), Lewis and Sexton(2004), Yaisawarng and Klein…...
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Journal Article•
TL;DR: In this article, the authors evaluate the productivity change of the NBA teams during the last seven seasons (from 2006-07 to 2012-13) and reveal that there has been technological progress for the last few seasons, excluding that of the 2011 lockout, and an increasing efficiency change.
Abstract: The aim of this work is to evaluate the productivity change of the NBA teams during the last seven seasons (from 2006-07 to 2012-13). Within that period of time, a new collective bargaining agreement (CBA) of the National Basketball Association (NBA) was ratified before season 2011-12, ending a 161-day lockout. The Malmquist Productivity Index (MPI) has been used to measure the total factor productivity, while an input-oriented Network DEA approach is used to compute the distance of each observation to the corresponding frontier. The results reveal that there has been technological progress for the last few seasons, excluding that of the 2011 lockout, and an increasing efficiency change. This means that best practices are improving and that most teams have been reducing their payrolls to catch up with these practices, thus backing up the owners’ proposal to reduce players’ income. Also regression results show that changes in the number of wins are more dependent upon scale efficiency change than upon budget or efficiency changes.
6 citations
TL;DR: The model makes it possible to extend efficiency analysis to professional sports organisations which have multiple objectives, and shows that the clubs are more efficient in converting their sporting and social results into income, than when turning their economic resources into sporting successes and social support.
Abstract: Previous works that have analysed the efficiency of the management of professional football clubs have not paid much attention to the interaction between the sporting, social and economic dimensions of their activity. To bridge this research gap, a DEA model is developed and applied to determine the relative efficiency of clubs participating in one of the main football leagues while taking into account their multiplicity of objectives. The proposed two-stage relational network DEA model assumes that the financial resources of the clubs are distributed between social and sporting dimensions, contributing to generate results in both areas that, in the second stage, determine the business performance of the clubs. As the actual distributions of the primary inputs are unknown, two complementary approaches are used. First, the model is solved by assuming a parameterization of the distribution. Then, a simulation model is used to study the effect of the different distributions on the efficiency by means of contour charts. A final cluster analysis completes the study. The sample consists of the 20 clubs that played in Spain’s First Division in the 2016–17 season. The evidence shows that the efficiency of the clubs increases when a higher proportion of the primary inputs is allocated to the social dimension. In addition, the clubs are more efficient in converting their sporting and social results into income, than when turning their economic resources into sporting successes and social support. As a result, the model makes it possible to extend efficiency analysis to professional sports organisations which have multiple objectives.
6 citations
Posted Content•
01 Feb 2013
TL;DR: In this paper, an additive two-stage data envelopment analysis (DEA) estimator was applied on a panel of 27 Annex I countries for the time period 2006-2010 in order to create sustainability efficiency indexes.
Abstract: In this paper we apply an additive two-stage data envelopment analysis (DEA) estimator on a panel of 27 Annex I countries for the time period 2006-2010 in order to create sustainability efficiency indexes The sustainability efficiency indexes are decomposed into economic and eco-efficiency indicators The results reveal inequalities among the examined countries between the two stages The eco-efficiency stage is characterized by large inequalities among countries and significantly lower efficiency scores than the overall or/and the economic efficiency stages Finally, it is reported that a country’s high economic efficiency level does not ensure a high eco-efficiency performance
6 citations
Cites methods from "Two-Stage DEA: An Application to Ma..."
...Multistage DEA models Typical DEA models evaluate the efficiency of a DMU while treating its internal structures as a “black box” which utilizes inputs to produce outputs without considering the internal structures, an assumption which is usually sufficient (Sexton and Lewis, 2003)....
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...Multistage DEA models Typical DEA models evaluate the efficiency of a DMU while treating its internal structures as a “black box” which utilizes inputs to produce outputs without considering the internal structures, an assumption which is usually sufficient (Sexton and Lewis, 2003)....
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25 Sep 2009
TL;DR: In this article, a two-stage data envelopment analysis (DEA) was used to analyze 15 countries' R&D efficiency and its ranking in evaluation. And the authors found that the activities in six countries on technological objectives are effective after applicable NIS determined.
Abstract: Following the approaching of knowledge economy, countries worldwide pay increasing attention on technology innovation; especially at the time of a changing global economical and trade environment, technology has great influence on national competitiveness. Hence, regardless of the establishment of technological policy, the investment of R&D funds and manpower, they are all closely connected to national overall objectives, which have crucial impact on the promotion of national competitiveness. This research is an exploratory study, mainly combining competitiveness index and NIS to establish a two-stage R&D efficiency evaluation model. We gathered the information from World Competitiveness Yearbook made public by IMD, Main Science and Technology Indicators (MSTI) from OECD, statistical data from US Patents and Trademark Office (USPTO), CD-ROM data of National Science Indicators (NSI) published by International Statistical Institute (ISI) and used two-stage data envelopment analysis (DEA) to analyze 15 countries' R&D efficiency and its ranking in evaluation. The research found the R&D activities in six countries on technological objectives are effective after applicable NIS determined.
6 citations
References
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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.
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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....
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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