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Abstract
The economic problem of a commercial beekeeper is akin to that of a traveling
salesman with the important difference that bees simultaneously pollinate crops and feed
on them. In other words, bees not only provide pollination services but also feed on the crops they visit. As a result, the number and price of bees available for pollination at any time for any crop is determined by the demand for pollination services and the supply
of bee food from other crops in the market.
I develop a dynamic model of yearly
fluctuations in the stock of honey bees and
combine it with an economic model of beekeeper's behavior. This dynamic model of
bee population highlights the fact that they are a renewable resource whose economic
value is derived from both extraction and the provision of pollination services. Losses
of hives to parasitic mites and other pests have a greater impact on the pollination
cost of crops that blossom early. The effect of honey subsidies on pollination fees is
ambiguous theoretically, which challenges previous results from the economics literature on pollination markets.