Departamento de Economía

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Budget efficiency performance in Formula 1
(2022-07) Afflitto, Pedro
This study will assess the efficiency of different F1 teams -or Constructors- based on their budget and points obtained during a racing season. A Data Envelopment Model (DEA) is used to measure each team's efficiency relative to each other. Teams or decision making units -as defined by the model- that lie on the efficient frontier are deemed efficient. We have conducted our analysis using data from 2008 to 2020 for a total of thirteen years. Most teams are inefficient, not only relative to each other but to their scale efficiency. The model also suggests projected budgets based on each constructor´s performance so that they may achieve the same result more efficiently. We will discuss the feasibility of these projections providing a variety of possible solutions and strategies taking into consideration Formula 1's current context and a detailed breakdown of a Constructor's cost.