Abstract: This paper use the method of grey correlation analysis to assess with rations the social and economic effects caused by soil and water conservation in ten catchments in Loess Plateau, it is showed that soil and water conservation project greatly promote rural society and economy to develop, and that the income per capita is the chief factor which reflects the effect of soil and water conservation on social and economic development, furthermore, the occupancy of foods per capita, the rate of land use , the investment for soil and water conservation per capita, the gross income of agriculture and the area of basic farmlands all are the important factors which reflect the effect of soil and water conservation on social and economic development. Only if the benefits of all of these factors are in good shape that the whole economy is healthy, so systems engineering theory must be introduced to assure environment and economy both develop well.