An improved grey relation model based on relative area change is proposed for the deficiency of the similitude degree of grey incidence and the absolute degree of grey incidence. Depending on the similitude degree of sequence curves, the relative area change that reflects the similitude degree of the sequence curves is constructed, and then the new relational coefficient is defined. At the same time, the new grey relation model is defined based on the mean value of the relational coefficients. Furthermore, according to the result of the relational analysis, a variable selection method is also proposed in order to reduce the irrelevant and redundant variables. The simulation results show the rationality and the effectiveness of the proposed algorithm.