Measuring Technical Efficiency in Sports

Standard economic production theory is the basis for measuring technical efficiency in sports. Using programming or regression models, efficiency is defined as the distance of a given team observation from the technology. In this paper, we show that the standard measures of efficiency using deterministic models are biased downward due to serial correlation with respect to the efficiency measure. In particular, if the number of observed wins for a given team is affected by the team's inefficiency, it is necessarily true that another team is able to produce outside of the technology. As a result, the observed frontier is not feasible if all inefficiency is eliminated. In this paper, we propose a correction to this problem and apply new models to estimate efficiency in professional football. JEL Code: xxx