Data Envelopment Analysis on Assessing the Efficiency of Japanese Film Release Market from 1955 to 2011

The film industry, as one crucial component of the leisure and entertainment industry, has received much attention in decades due to its great contribution to the economy and culture. Undoubtedly, with the presence of a big domestic market and excellent works, the Japanese film industry is playing a crucial role both to Japan and the world.

This study examines economic performance of Japanese film release market quantitatively from the perspective of input-output by applying the method of DEA based on the data from 1955 to 2011, and tries to interpret the change in light of historical development. The results demonstrate a wide range of efficiency among the individual units, and suggest a new perspective to recognize the performance of Japanese film industry for years.

Specifically, the models adopted in this study are Charnes, Cooper, and Rhodes model (CCR, 1978) and Banker, Charnes, and Cooper model (BCC, 1984), which are frequently used models of DEA. Technical efficiency (CCR efficiency) measures a DMU’s ability to convert inputs to outputs given the size of the DMU. On the other hand, by decomposition of CCR efficiency scores, BCC scores (Pure Technology Efficiency) and Scale Efficiency (SE) is calculated to examine whether the scale of the industry has any impact on its efficiency. The input includes number of screens, number of Japanese films released, number of imported films released, and average admission fee. On the other hand, the number of admission and box office receipts is output. The results also present the change of inefficiency slacks on basis of input-oriented model, which suggests the potential improvement room for input. Based on the above calculation, possible reasons for the changes of efficiencies and also some managerial implications and helpful insights are provided to competitors, investors and researchers.