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Two-Stage DEA: An Application to Major League Baseball

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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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Authors and Affiliations

  1. Harriman School for Management and Policy, Stony Brook University, Stony Brook, New York, 11794-3775

    Thomas R. Sexton & Herbert F. Lewis

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  1. Thomas R. Sexton
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  2. Herbert F. Lewis
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Sexton, T.R., Lewis, H.F. Two-Stage DEA: An Application to Major League Baseball. Journal of Productivity Analysis 19, 227–249 (2003). https://doi.org/10.1023/A:1022861618317

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  • DOI: https://doi.org/10.1023/A:1022861618317

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