Nearly all digital cameras can process the image from the sensor into a JPEG file using settings for white balance, color saturation, contrast, and sharpness that are either selected automatically or entered by the photographer before taking the picture. Cameras that produce raw files save these settings in the file, but defer the processing. This results in an extra step for the photographer, so raw is normally only used when additional computer processing is intended. However, raw has numerous advantages over JPEG such as:
Higher image quality. Because all the calculations (such as applying gamma correction, demosaicing, white balance, brightness, contrast, etc...) used to generate pixel values (in RGB format for most images) are performed in one step on the base data, the resultant pixel values will be more accurate and exhibit less posterization.
Bypassing of undesired steps in the camera's processing, including sharpening and noise reduction
JPEG images are typically saved using a lossy compression format (though a lossless JPEG compression is now available). Raw formats are typically either uncompressed or use lossless compression, so the maximum amount of image detail is always kept within the raw file.
Finer control. Raw conversion software allows users to manipulate more parameters (such as lightness, white balance, hue, saturation, etc...) and do so with greater variability. For example, the white point can be set to any value, not just discrete preset values like "daylight" or "incandescent". As well, the user can typically see a preview while adjusting these parameters.
Camera raw files have 12 or 14 bits of intensity information, not the gamma-compressed 8 bits stored in JPEG files (and typically stored in processed TIFF files); since the data is not yet rendered and clipped to a color space gamut, more precision may be available in highlights, shadows, and saturated colors.
The color space can be set to whatever is desired.
Different demosaicing algorithms can be used, not just the one coded into the camera.
The contents of raw files include more information, and potentially higher quality, than the converted results, in which the rendering parameters are fixed, the color gamut is clipped, and there may be quantization and compression artifacts.
Large transformations of the data, such as increasing the exposure of a dramatically under-exposed photo, result in less visible artifacts when done from raw data than when done from already rendered image files. Raw data leave more scope for both corrections and artistic manipulations, without resulting in images with visible flaws such as posterization.
