Abstract: Motion estimation uses tally (Population Count) and XOR (or other bit-wise comparison) operations to obtain a block-match measure for reference and predicted blocks to identify motion vectors for use in video compression. The XOR operations can be performed on absolute or relative luminance data. For example, a one-bit-per-pixel representation of a block can indicate for each pixel its luminance relative to a local average luminance. The performance improvement offered by the invention (relative to methods using the absolute value of the differences of absolute luminance values) can more than offset a penalty in block-match accuracy due to loss of information in luminance data reduction and/or the ignoring of bit significance due to the bit-wise comparison.