Efficiency Evaluation of Football Teams in English Premier League: Application of Data Envelopment Analysis

Abstract

In this paper, the financial efficiency of football clubs in English Premier League during 2016-17 season is determined. From a methodological perspective, we use Data Envelopment Analysis (DEA), a deterministic nonparametric frontier method. In particular, variable returns to scale and slack based measure are employed to assess whether teams are spending more resources than they need to achieve efficiency. DEA allows for inclusion of multiple inputs and outputs in assessing the efficiency and provides benchmarks for inefficient clubs. The input parameters selected are total expenses which include the salaries of players, coaches, managers and supporting staff. The output variables being revenue generated, profit gained and points scored at the end of the season.