A scaleable macro block rate control method particularly well-suited for MPEG video. There is provided a method to easily derive a quantization parameter (QP) value using information such as bit usage, previous QP values and SAD values from the past encoded and future frames. The method utilizes quantization estimation techniques based on statistical relationships between different intensity measures, such as distortion intensity, absolute difference intensity and mean of absolute difference intensity. The method is well-suited to applications utilizing MPEG video such as MPEG-1, MPEG-2, MPEG-4, JVT/H.264 standards and so forth.