Application of Grey Prediction Theory to Forecast Expenditure for Science & Technology: Evidence from Henan Province in China

Based on the statistical data during the period from 2005 to 2008 released by Henan Statistical Bureau in China, this paper aims to predict the amount of expenditure for science and technology of Henan province in China by the usage of GM (1, 1) model with the four items. The result of this empirical study is that the grey prediction theory can fit the expenditure for science and technology amount development precisely in Henan province. The accuracy of the prediction result is above 90% and corresponds with a distinction, which the grey theory can meet expectations with small samples or data. Research results show that this model established in this paper could provide valuable information for policy makers in their efforts to make appropriate technological policies.