DEA applications to major league baseball: Evaluating manager and team efficiencies

Abstract

This chapter provides a brief review of previous applications of data envelopment analysis to the professional baseball industry followed by two detailed applications to Major League Baseball. The first application presents a DEA model which evaluates the efficiency of Major League Baseball managers. This application calculates the output oriented technical efficiencies and super efficiencies for managers from 1986 to 2011. The model assumes that managers are given a certain set of players and evaluates how well they turn those players into wins. A second DEA model is used to evaluate the allocation of resources within a team and identify opportunities for improvement. This model assumes that teams are constrained by their total player budget and evaluates how well the team produces both wins and playoff wins given that budget. A ranking of franchises based on their efficiency from 1986 to 2011 is presented. A method for evaluating the allocation of resources within a specific team during a specific season is also described. Taken together these two applications should provide the reader with a basic understanding of the DEA methodology and how it can be applied to the professional baseball industry.