Measuring the efficiency of NBA teams: Additive efficiency decomposition in two-stage DEA

Chih Hai Yang, Hsuan Yu Lin, Chiang Ping Chen

Research output: Contribution to journalArticlepeer-review

24 Scopus citations

Abstract

This paper evaluates the efficiency of National Basketball Association (NBA) teams under a two-stage DEA framework. Applying the additive efficiency approach, we decompose overall team efficiency into first-stage wage efficiency and second-stage on-court efficiency and find out the individual endogenous weights for each stage. The empirical results show that NBA teams present a better performance on wage efficiency than for on-court efficiency, as on-court efficiency is influenced by many uncontrollable factors. Moreover, NBA teams, on average, tend to possess a higher weight on the first stage, suggesting that teams' managers can enhance organizational efficiency more efficaciously by prudentially recruiting players.

Original languageEnglish
Pages (from-to)565-589
Number of pages25
JournalAnnals of Operations Research
Volume217
Issue number1
DOIs
StatePublished - Jun 2014

Keywords

  • Additive efficiency decomposition
  • NBA
  • On-court efficiency
  • Wage-efficiency

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