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Modeling Operational Efficiency Using Data Envelopment Analysis: Evidence From Atlantic City Hotels

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  • Ya-Ling Huang
  • In-Fun Lee
  • Yen-Hsien Lee

Abstract

The casino entertainment industry is an intensely competitive environment with many operational risks, explaining why casino managers highly prioritize performance evaluation. This study develops a performance evaluation model based on data envelopment analysis (DEA) to determine casino managerial efficiency in 2007 and the change in efficiency for eleven casinos from 2003-2007 in Atlantic City. Analytical results suggest an apparently high technical efficiency and low scale efficiency, indicating that managerial inefficiency derives mainly from an inappropriate scale of business in the casino entertainment industry of Atlantic City. Moreover, weak industrial growth of casino entertainment implies that front runners should closely examine systematic problems in their management strategies.

Suggested Citation

  • Ya-Ling Huang & In-Fun Lee & Yen-Hsien Lee, 2012. "Modeling Operational Efficiency Using Data Envelopment Analysis: Evidence From Atlantic City Hotels," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 6(3), pages 63-72.
    • Handle: RePEc:ibf:gjbres:v:6:y:2012:i:3:p:63-72
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    References listed on IDEAS

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    Cited by:

    1. Chia-Chi Lee, 2014. "Performance evaluation of CPA firms in Taiwan from the perspective of industry-specific client groups," Service Business, Springer;Pan-Pacific Business Association, vol. 8(2), pages 267-293, June.

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    More about this item

    Keywords

    Data envelopment analysis (DEA); Performance evaluation; Casino management Slacks-based measure (SBM); Managerial efficiency;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • G00 - Financial Economics - - General - - - General

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