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Abstract

The overall objective of this paper is to measure the impact of the undesirable outputs from NAFTA (agricultural production and trade) on the environment by years in post-NAFTA period. Data Envelopment Analysis (DEA) was used to measure environmental efficiency by considering desirable (corn production) and undesirable (nitrogen) outputs in fifteen states. DEA allowed us to measure the level of nitrogen pollution to be reduced by modeling undesirable output in efficiency evaluation. Data from 15 states (Colorado, Illinois, Iowa, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, Ohio, South Dakota, Texas and Wisconsin) on corn production, land use and nitrogen fertilizer from 1994-2008 (post-NAFTA) were considered. The results indicated environmental inefficiency, nitrogen pollution and land use inefficiency were increasing over the years in the post-NAFTA period.

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