Abstract: In this paper, several cases of false prediction (prediction without earthquake occurrence) and missing prediction (earthquake occurrence without prediction) are reviewed on the basis of the present scientific level of earthquake prediction in China. The cost needed to be paid for transformation of a prediction into social action is analysed and compared with the economic losses that would be caused by the earthquake. From this it is recomended to comprehensively evaluate the social and economic impact of both the earthquake disaster and the cost of prediction.Based on the data of the economic losses resulted from several major earthquakes in China, the relationship curves between earthquake magnitudes and economic losses and that of the losses caused by the earthquake predictions are plotted and discussed by introducing a cost index of the earthquake, It is believed by the authors of this paper that in order to practicallly and effectively reduce casualties and economic losses, the issuance of an earthquake prediction sould be weighed against magnitude, and there should be a lower limit in magnitude for earthquake prediction. According- to the present level of earthquake prediction, forecasts of earthquakes of magnitudes 6 or smaller are not appropriation to be issued to the public; but instead, earthquake resistance and preparedness measures should be promoted.