Abstract: The picture quality of an MPEG-coded video signal can be improved considerably by modifying selected coefficients after conventional quantization, for example by rendering them zero. The modification is such that the Lagrangian cost D+.lambda.R (D is distortion, R is bitrate) is minimal for a given value of a Lagrange multiplier .lambda.. A relatively simple process is disclosed in which the value of .lambda. is calculated by means of statistical analysis (6) of the picture to be coded. The statistical analysis comprises the estimation of the RD curve on the basis of the amplitude distribution of the coefficients. The searched .lambda. is the derivative of this curve at the desired bitrate.