Is Professional Baseball Fielders’ Performance Reflected in Their Compensation Structure? An Application of Three-Stage Data Envelopment Analysis

Abstract

Once a national sport, baseball in Taiwan has been devalued with repeated cheating_x000D_ in local games and underperformance in international tournaments. Although some_x000D_ attribute its demise to the compensation structure, there does not seem to be any_x000D_ empirical assessment of whether Taiwan’s baseball players are paid based on their_x000D_ efficient performance. This paper investigates a sample of 59, 190, and 385 fielders_x000D_ in Taiwan, Japan, and the US, and applies three-stage (including individual and_x000D_ system) data envelopment analysis (DEA) to evaluate the compensation structure_x000D_ with 25 batting and fielding records in 2008 and compensation data in 2009. Overall,_x000D_ our findings suggest that the compensation structure in Taiwan’s professional_x000D_ baseball industry appears to be more (less) efficient in terms of national_x000D_ (international) rankings, implying a significant compensation gap for local players_x000D_ vis-à-vis those with the same performance in Japan and in the US. Hence, it is_x000D_ imperative to reestablish the credibility of the industry to attract more fans, which_x000D_ will serve to secure a higher level of compensation for Taiwan’s players.