farmers rent the services of beekeepers to bring bees into their fields and orchards. They find that the yield advantage, the increase in almonds per acre or watermelons per acre from bringing in bees is well worth what they have to pay the beekeeper. And now let me stretch your entomology knowledge a little bit. How did the bees get home when home has been moved? Right? You don't just let them go and say, thanks a lot, they come back.
Wally Thurman of North Carolina State University and PERC talks with EconTalk host Russ Roberts about the world of bees, beekeepers, and the market for pollination. Thurman describes how farmers hire beekeepers to pollinate their crops and how that market keeps improving crop yields and producing honey. Thurman then discusses how beekeepers have responded to Colony Collapse Disorder--a not fully understood phenomenon where colonies disband, dramatically reducing the number of bees. The discussion closes with the history of bee pollination as an example of a reciprocal externality and how Coase's insight helps understand how the pollination market works.