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In ultrasound elasticity imaging, strain decorrelation is a major source of error in displacements estimated using correlation techniques. This error can be significantly decreased by reducing the correlation kernel. Additional gains in signal-to-noise ratio (SNR) are possible by filtering the correlation functions prior to displacement estimation. Tradeoffs between spatial resolution and estimate variance are discussed, and estimation in elasticity imaging is compared to traditional time-delay estimation. Simulations and experiments on gel-based phantoms are presented. The results demonstrate that high resolution, high SNR strain estimates can be computed using small correlation kernels (on the order of the autocorrelation width of the ultrasound signal) and correlation filtering.