An analysis of Chinese government expenditure using dynamic binary panel data

In this article, we model the government expenditure on the welfare change of general public by means of static and dynamic binary response model for panel data. We analyse the effectiveness of the total magnitude and the structure of the Chinese government expenditure on the basis of its effects on the welfare of Chinese citizens. We construct both the static and dynamic models. And we also do a further analysis of the state dependence of the welfare change of Chinese citizens by means of the survival analysis. The estimation results imply that the total amount of the Chinese government expenditure is not oversized but its allocation is not efficient. And expenditures in some fields are not utilized efficiently.