Efficiency Measurement of the National Basketball Association with a Random Frontier Model

• Main Authors: Kuang-Ting Cheng, 鄭光廷
• Other Authors: Wen-Jhan Jane
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/c4whm2

碩士 === 世新大學 === 經濟學研究所(含碩專班) === 103 === This research uses Bayesian Stochastic Frontier Analysis Method to examine salary paying method of selected filed in the industry. We further apply the method on current NBA players to see if over-paid do exists. According to the result, the longer the player stays in the league, the more payment is asked, however, the less is exactly received. Our Panel analysis shows that any team in NBA has to lower its none-effective data in order to rise up the number of winning games and put itself on a more competitive position. After examining all the teams in both conferences in the league, the overall none-effective data of the Eastern conference is higher than that of the Western conference by 0.055. This explains why the Western conference teams perform better than that of The Eastern conference for the past 10 years. Therefore, in order for the Eastern conference teams to have better performance, the non-effective rate of each team has to be reduced. And by doing so, the balance of the two conferences then could be reached. When further analyzing into teams in each division, the Southwest division has the best data over all other divisions. According to our record, Southwest division’s data is better than the Atlantic division by 0.133, the Central division by 0.133, the Central division by 0.066, the Northeast division by 0.074, the Pacific division by 0.075 and the Southeast division by 0.116. Among the Eastern conference, only the Central division is competitive with divisions in Western conference. Based on the result we found, although teams with greater resource and market (e.g. The New York Knicks) are willing to pay their players more, however, they do not necessarily perform better unless their team effective data rates are increased.