What does exposure compensation do?
If I take a photo with a given shutter speed, aperature, and ISO, and then take the same shot with +1EV or -1EV, what is actually happening?
Is this just a gain control on the sensor?
Can you achieve the same thing by changing ISO?
Exposure compensation changes the target exposure. Normally the camera is trying to work the settings to get about 18% grey (reflectance), but with exposure compensation of +1EV you are basically just saying to the camera "I want to expose this scene 1 stop lighter than the normal average."
Changing ISO vs Exposure Compensation
Manual shooting
Automatic modes
What does exposure compensation do?
Although I agree with the technical aspects of the other answers, I still prefer to explain "exposure compensation" in lay terms as a way to impose a disagreement with the camera opinion about the shot. :o)
Every time you point your camera to a scene, it tries to calculate how much light should hit the sensor in order to obtain a well balanced (again, according to the camera calculations) picture but allowing a fast enough shutter speed so the risk of blurring it due to vibration or subject movement is minimized.
In the progam mode (P) The camera uses something like this in order to decide the settings for a scene:
In the aperture and shutter priority modes (A or Av, S or Tv) the aperture or shutter speed are set by you and the camera defines the other two parameters using the above logic.
That means that if the scene has enough light you will end with sensible settings for the three parameters (ISO, aperture and speed) and things tend to work out well.
But most of the times things are not that pretty. Either you get too much light (beach scenes, snow, backlights etc) or too little (dark places, night shots etc) and the camera calculations starts to work against what you may consider a nice shot.
This is where exposure compensation can help you. By tweaking with it you can either explain to the camera that you want it to consider less light in the calculations (moving the compensation to negative values) or to consider more light (moving the compensation to positive values).
The bottom line is, exposure compensation is an easy way for you to influence in the camera calculations in order to make it do things closer to what you want then what it would assume was "correct".
If I take a photo with a given shutter speed, aperture, and ISO, and then take the same shot with +1EV or -1EV, what is actually happening?
Note that in order to set all the three elements (speed, aperture and ISO) you would have to be in Manual mode (M), where there is no exposure compensation controls.
OTOH, if you fix one or two of them, the rules described above apply.
Is this just a gain control on the sensor?
No, that would be the ISO. Exposure compensation is about how much light will make part of the picture, ISO is one of the ways to control that.
Can you achieve the same thing by changing ISO?
Only if you are in Manual mode, otherwise the change in the ISO would only alter the balance between the other two factors (aperture and shutter speed). In Manual mode the change in ISO would indeed change the amount of light captured, so it would impact in the brightness of the picture.
Exposure compensation only works in one of the [semi] automatic modes (Tv, Av, P etc.) it's usually used to account for the simplicity of the camera's metering system (the camera assumes everything you try and photograph is middle grey). Using it will cause the camera to adjust the settings (shutter, aperture, ISO depending on your shooting mode) to either increase or decrease the exposure.
There are also times when you want to intentionally over or underexpose for example when shooting for HDR, or when you want to minimise noise (at the expense of highlight colour fidelity and detail) by exposing to the right (ETTR) and EC is a good way of doing this if you don't want to shoot in manual.
Basically don't think of EC as "exposure compensation" think of it as "poor in-camera metering compensation"
Can you achieve the same thing by changing ISO?
No. Changing the ISO doesn't change the exposure, just like changing the shutter speed and aperture don't change the exposure (unless you're in manual mode). If you're in an auto mode, and you change any of those three, the camera will adjust one of the others to maintain what it thinks is correct exposure.
Stepping back a second, the only things that the camera can change to change the exposure are:
When you change the exposure compensation to +1 EV you're telling the camera to over-expose the image (compared to what it thinks the correct exposure is) by 1 f-stop.
Once you've told it to over-expose, it will then change either the shutter-speed, the aperture, or the ISO to change the exposure. In aperture priority the camera will decrease the shutter speed, in shutter priority the camera will widen the aperture, in automatic it could do either. If auto-iso is turned on, it might adjust the ISO. In manual mode, exposure compensation has no effect.
For example, if you were in aperture-priority, at f/4, and ISO 200, the camera might think correct exposure would be at 1/100s. If you set exposure compensation to +1EV, you're telling the camera to over expose, so its going to adjust the shutter speed to 1/50s.
EV affects exposure in every mode but manual. It is extremely handy when working with advanced lighting systems that incorporate TTL.
Changing ISO won't make a difference, unless you push it beyond the range of the camera's ability to make a proper exposure. The camera will compensate with aperature or shutter speed (depending on your mode) countering your ISO change.
EV, in these modes, is THE WAY you control exposure. Very helpful on the fly. Some purists (myself, until recently included) think this is a cheat. Manual is the only way to fly. They are wrong.
Joe McNally, TTL super-star and award winning photog, likens this attitude to purchasing a Ferrari and driving it like a Volkswagen. TTL and EV allow you to move fast, concentrate on your subject, and deliver the same, if not better, exposure control as a full manual setup.
For more info check McNally's site.
Note: All of the other answers to this question were correct when they were written back in 2010, but cameras have changed a lot since then! This answer will concentrate on those changes.
Exposure Compensation has absolutely nothing to do directly with the gain control of the sensor. The sensor gain is controlled by the ISO setting.¹ The exposure compensation value at the time the image is captured has no effect on the way the raw data is processed by the camera or a post-processing application running on a computer or other device.
Exposure Compensation (EC) is a way of controlling the camera's metering system so that we can tell it we want our photo to look brighter or darker than an average scene.
We need this control because, basically, the camera does not know if we are trying to take a picture of a black cat in a coal mine or a white cat in the snow. If left alone, the camera will try to make both of those images a medium gray rather than a dark, near-black image or a bright, near-white image.
Without EC, if we are in one of the semi-automatic exposure modes (P, Tv, Av) and we manually change the ISO setting in one direction the camera will change another exposure parameter - Tv or Av - in the opposite direction to compensate and maintain the same exposure value. By using EC and making no other changes manually, the camera will change one or more of the three exposure parameters - ISO, Tv, or Av - in only one direction to make the image brighter or darker.
Suppose the camera is in Av (aperture priority) exposure mode, the aperture is set by the user at f/5.6, the ISO is set by the user at 100, and the camera meters a scene with [0 EC] at 1/1000 second. This would produce a medium exposure under fairly bright conditions (about 2 1/3 stops brighter than the 'sunny 16' rule of thumb).
But we are at the beach, and the sand is a very light near-white shade that is much brighter than "medium" to our eyes. To make the sand look like it looks to our eyes in the picture we need to increase the exposure. We can dial in a setting of [+1.3 EC]². When the camera meters the exact same scene the only parameter it can change in our scenario above is the Tv. We've locked the Av at f/5.6. We've locked the ISO at 100. To expose 1 1/3 stops brighter the camera will change the Tv from 1/1000 without EC to 1/400 second with [+1.3 EC].
The reason our second photo is brighter than the first is because the shutter time is longer, not because that shutter time was obtained using [+1.3 EC]. If we had manually selected all three exposure parameters - ISO 100 , f/5.6, and 1/400 - without using EC at all the image would look exactly the same as the image obtained using Av mode, and selecting an Av of f/5.6, ISO 100, and letting the camera select 1/400 based on the brightness of the scene combined with our [+1.3 EC] setting.
How this works out in cameras available in 2017 is a lot more varied than it was with most cameras already around back in 2010.
¹ EC can indirectly affect the sensor gain by causing the camera to change the ISO setting in order to comply with an EC value. But it is the actual change to the ISO setting that alters the sensor gain, not the fact that an EC value is what induced the camera to change the ISO. Changing the ISO setting manually will have the exact same effect on the sensor gain as changing an EC value which causes the camera to change to the same ISO setting.
² In photography, certain numbers are 'shorthand' for more precise numbers. In the context of stops, 1.3 is used to communicate 1 1/3 (1.3333 with an infinitely repeating 3 to the right of the decimal). 1.7 is used to communicate 1 2/3 stops. In the aperture value scale, 1.4 and its multiples are used to communicate √2 (1.4142135623730950488016887242097... ad infinitum) and its multiples. For more, please see Is there a sane reason why ¹⁄₁₂₅ is not, instead, exactly half of ¹⁄₆₀?
