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Unlike conventional layered scalable video coding, leaky prediction layered video coding (LPLC) introduces a leaky factor α, which takes on values in the range between 0 and 1, to partially include the enhancement layer in the motion compensation loop, hence obtaining a trade-off between coding efficiency and error resilience performance. In this paper, we use quantization noise modeling to theoretically analyze the rate distortion performance of LPLC. An alternative block diagram of LPLC is first developed, which significantly simplifies the theoretical analysis. Closed form expressions, as a function of the leaky factor, are derived for two scenarios, where drift error occurs in the enhancement layer and no drift occurs within the motion compensation loop. Theoretical results are evaluated with respect to the leaky factor, showing that a leaky factor of 0.4-0.6 is a good choice in terms of the overall rate distortion performance of LPLC.