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One approach relies on the average properties of the transform coefficients, while
the other approach assigns bits as needed by individual transform coefficients.
In the first approach, we first obtain an estimate of the variances of the transform
coefficients.
These estimates can be used by one of two algorithms to assign the number of bits
used to quantize each of the coefficients.
We assume that the relative variance of the coefficients corresponds to
the amount of information contained in each coefficient.
Thus, coefficients with higher variance are assigned more bits than
coefficients with smaller variance.
Let us find an expression for the distortion, then find the bit allocation
that minimizes the distortion.