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Technical efficiency with multi-output, heterogeneous production: a latent class, distance function model of english football

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  • R. Todd Jewell

    (Texas State University)

Abstract

This study combines the output distance function approach with a latent class model to estimate technical efficiency in English football in the presence of productive heterogeneity within a stochastic frontier analysis framework. The distance function approach allows the researcher to estimate technical efficiency including both on-field and off-field production, which is important in the case of English football where clubs are generally thought to maximize something other than profit. On-field production is measured using total league points, and off-field production is measured using total revenue. The data set consists of 2177 club-level observations on 88 clubs that competed in the four divisions of professional football in England over the 29-season period from 1981/82 to 2009/10. The results show evidence of three separate productivity classes in English football. As might be expected, technical efficiency estimated using the latent class model is, on average, higher than technical efficiency using an alternative method which confines heterogeneity to the intercept coefficient. Specifically, average efficiency for the sample is 87.3 and 93.2% for the random-intercept model and the latent class model respectively.

Suggested Citation

  • R. Todd Jewell, 2017. "Technical efficiency with multi-output, heterogeneous production: a latent class, distance function model of english football," Journal of Productivity Analysis, Springer, vol. 48(1), pages 37-50, August.
    • Handle: RePEc:kap:jproda:v:48:y:2017:i:1:d:10.1007_s11123-017-0508-4
    DOI: 10.1007/s11123-017-0508-4
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    Cited by:

    1. Guohua Feng & Todd Jewell, 2021. "Productivity and efficiency at english football clubs: a random coefficient approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(5), pages 571-604, November.
    2. Julia Schaefer & Marcel Clermont, 2018. "Stochastic non-smooth envelopment of data for multi-dimensional output," Journal of Productivity Analysis, Springer, vol. 50(3), pages 139-154, December.
    3. David Boto‐García & Carlos Varela‐Quintana & Alvaro Muñiz, 2023. "Foreign players, team production, and technical efficiency: Evidence from European soccer," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1209-1241, October.
    4. R. Todd Jewell, 2020. "NCAA Expenditure and Efficiency: Analyzing Generated and Allocated Revenue in the Football Bowl Subdivision," Journal of Sports Economics, , vol. 21(4), pages 363-390, May.

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