Study on priority order of public goods supply in China rural area based on the economic effects

Based on endogenous growth theory, this paper analyzes the effect on economic growth of national agricultural expenditure, compulsory education, health care and social security in rural area using the 1994 ∼ 2008 time series data. Through Co-integration test of the associated data combined with error correction model and state-space model, it shows: in the short term, agricultural expenditure has a positive economic effect; however, heath care and social security has a negative effect. In the long run, the order of economic growth impact is agricultural expenditure, health care, education, and social security. Therefore, according to economic growth effects, rural public goods supply priority sequence should be agriculture expenditure, heath care, compulsory education and social security.