The Baitor's Argument for Welfare Maximization

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In 1973, Stephen Chung found that beekeepers in Washington state were charging for pollination services. He was a student of Ronald Cosses and I talked to Cosses once about this. We have the same argument turned on its head due to the positive nature of the externalities., he says. "We should be subsidizing both of these industries"

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.