To encode a moving picture in real time in as high quality as possible, no matter whether a target bit rate for encoding the moving picture is high or low.An encoder performs motion compensated inter-picture predictive coding on moving picture data in a selected one of prediction modes. The encoder includes: a detecting section for detecting an accumulated error and a motion vector of a block, included in a picture to be encoded, by reference to a block in a reference picture to be used for each prediction mode; an estimating section for calculating an estimated value by adding a product of each accumulated error and a predetermined first coefficient and that of a predicted vector associated with each motion vector and a second coefficient; a determining section for selecting one of the prediction modes according to the estimated value; a coefficient updating section for updating a proportionality factor using at least a quantization scale used when the block to be encoded is quantized; and an encoding section for encoding the data of the block to be encoded in the prediction mode selected.