Business School, Sichuan University, No. 24 South Section 1, Yihuan Road, Chengdu 610065, China
Business School, Sichuan University, No. 24 South Section 1, Yihuan Road, Chengdu 610065, China.
Choice modelling is valuable for understanding and predicting customer behaviour. This study introduces the Group Method of Data Handling (GMDH) into choice modelling and applies this new technique to model consumer choice in the longdistance communication market. When we compare the GMDH with the Articial Neural Network (ANN) and logit models, the results show that the new model provides better predictions of customer choice than the ANN and logit models. In addition, the new model can identify the important explanatory variables that aect customer choice, and reveal how the variables aect this choice, which cannot be directly accomplished using the ANN model. This advantage will help rms to better analyse the behaviour of their customers and, thereby, develop suitable marketing strategies.