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

Huang, Ya-Ling; Lee, In-Fun; Lee, Yen-Hsien

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

Global Journal of Business Research, Vol. 6, No. 3, pp. 63-72, 2012

10 Pages Posted: 5 Jan 2012

See all articles by Ya-Ling Huang

Yen-Hsien Lee

Chung Yuan Christian University

Date Written: 2012

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.

Keywords: Data envelopment analysis (DEA), Performance evaluation, Casino management

JEL Classification: C44, C61, G00

Suggested Citation: Suggested Citation

Huang, Ya-Ling and Lee, In-Fun and Lee, Yen-Hsien, Modeling Operational Efficiency Using Data Envelopment Analysis: Evidence from Atlantic City Hotels (2012). Global Journal of Business Research, Vol. 6, No. 3, pp. 63-72, 2012, Available at SSRN: https://ssrn.com/abstract=1957287