An improved technique of compressing image data involves separating a prediction error of image data into distinct factors and applying a separate set of context models to each factor. Such factors may take the form of a sign, a bit category, and a relative absolute value of the prediction error. For each factor, the improved technique provides a set of context models and a procedure for selecting a context model from each respective set. The context model for each factor determines a probability distribution of symbols that may represent that factor, which in turn enables compression of the prediction error. Additionally, the symbols that represent certain factors into which the prediction error is separated result from a binary representation whose form—either unary or uniform—depends on the size of the prediction error.