Efficient encoding of object boundaries has become increasingly prominent in areas such as content-based storage and retrieval, studio and television post-production facilities, mobile communications and other real-time multimedia applications. The way distortion between the actual and approximated shapes is measured however, has a major impact upon the quality of the shape coding algorithms. In existing shape coding methods, the distortion measure do not generate an actual distortion value, so this paper proposes a new distortion measure, called a modified distortion measure for shape coding (DMSC) which incorporates an actual perceptual distance. The performance of the Operational Rate Distortion optimal algorithm  incorporating DMSC has been empirically evaluated upon a number of different natural and synthetic arbitrary shapes. Both qualitative and quantitative results confirm the superior results in comparison with the ORD lgorithm for all test shapes, without any increase in computational complexity
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