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A method is proposed to optimize the prediction coefficient of a first order predictor. The optimization is with respect to the sensitivity of variations in statistics of the video signal. Given the characteristics of human vision, it has been shown that the DPCM is not worse than the PCM with respect to the sensitivity to variations in the input video signal statistics, but is even better than the PCM. Also, the following point is made clear. If an encoding system is designed with a = as (Â¿Mo) providing the satisfactory quality for the picture with Â¿ = Â¿Mo, this system will yield picture of better or equal quality as for Â¿ = Â¿Mo for any other picture.