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An information theoretical approach is applied to analyze the performance of hierarchical 16 quadrature amplitude modulation (QAM). Using the approach, it is quantitatively evaluated how much the hierarchical 16 QAM outperforms non-hierarchical, conventional 16 QAM. More specifically, two kinds of performance comparisons are examined. First, the performance of the hierarchical QAM combined with layered source encoding (such as scalable video coding) is compared to that of the non-hierarchical QAM without layered source encoding. Second, the former is compared to the performance of the non-hierarchical QAM, also with layered source encoding.