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How exactly we should describe the process of Entropy Coding in wavelets ? can't it be simply called Coding ?

Here is the block Diagram of Image compression using wavelet,

enter image description here

I am confused about the "Entropy Coding" part. Can i simply use Huffman coding to code bits ?

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The goal of entropy coding is to code your data such that the length of the code associated with a symbol is close to $-\log_2 p$, where $p$ is the probability of the symbol (Shannon's limit). This can be achieved through different techniques: Huffman coding is one of them, but arithmetic coding is another option - or if the distribution of the coefficients can be known in advance, a pre-computed code can be specified. The choice of an entropy coding method is motivated by performance/complexity trade-offs, and by the known (or unknown) distribution of the coefficients. If two transforms generate the same distribution of coefficients, the same entropy coding methods can be used for both.

Since the diagram from your question hints that your application is JPEG2000 compression, I suggest you to look into the JPEG2000 specifications to see which entropy coding method they have actually specified.

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    $\begingroup$ Good answer. To the OP's question about why it isn't just called "coding", that term by itself can be ambiguous. In information-theoretic contexts, you have coding that is used to reduce redundancy in a stream of information (as it was here, usually called "source coding" or "entropy coding"), or you have coding that is used to add redundancy to a stream of information to make it resistant to errors ("error-control" or "error-correcting" codes). Being more specific helps to resolve potential confusion. $\endgroup$ – Jason R Mar 15 '13 at 14:05

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