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Quality criteria for image coding are often based on mean square error. However, this is not always a relevant measure of visual quality at low bit rates. Here, we investigate the properties of a distortion measure based on the conditional differential entropy of the input signal given its quantized value. The proposed measure appears to be a correct representation of the amount of information lost by quantization. An adaptive bit allocation algorithm is proposed in order to take advantage of this criterion. Experimental results illustrate the behavior of the proposed distortion measure and exhibit interesting visual properties for low bit-rate subband image coding.