Abstract
This study examines productivity dynamics in the U.S. casino gaming industry under economic crisis conditions using a double frontier data envelopment analysis framework. While traditional Malmquist productivity index approaches rely on optimistic efficiency frontiers, such methods may overstate resilience during downturns by overlooking inefficiency expansion. Using state-level data from twelve U.S. casino markets between 2006 and 2012, this study integrates both optimistic and pessimistic DEA perspectives to construct a double frontier Malmquist productivity index. The results reveal substantial divergence between optimistic and pessimistic productivity measures, particularly during the Great Recession, with several states exhibiting inefficiency-driven productivity decline that is not captured by conventional methods. By jointly accounting for frontier advancement and inefficiency dynamics, the proposed framework provides a more comprehensive assessment of productivity change. The findings highlight the importance of dual-frontier productivity measurement for evaluating tourism resilience, crisis preparedness, and regulatory stress-testing in gaming and other tourism-related industries.
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