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A reduced chi‐squared test has been used to evaluate factors that affect the spatial resolving power of large array biomagnetic sensors for the brain. Realistic array geometries are used and a classical description of spatial resolving power is applied to determine when two separate sources may be resolved. Array parameters such as sensor spacing, coil diameter, and gradiometer type are varied to determine their effect on spatial resolving power. The consequences of the number of sensors is considered and a comparison of existing systems is made. The effects of the vector nature of magnetic sources on spatial resolving power is also considered. It is shown that spatial resolving power is not strongly dependent upon individual sensor diameter, but that sensor spacing is important. It is also found that the instrumental spatial resolving power as a function of depth degrades much more quickly when planar gradiometers are used, as compared to axial gradiometers.