Does downsizing the effective recording megapixel count setting on my P&S digital camera actually decrease the sensor-megapixel density, thereby increasing pixel size and culminating in better image quality, or is it a gimmick? In other words, should I set the megapixel count on my 12 megapixel camera at 8 or 5 MP since I won't be printing anything larger than 4x6, if at all? I am interested in any possible noise reduction. My camera is a Panasonic Lumix DMC-ZS15.
The raw image file captured by the camera (before it's converted to a jpeg) will be the same regardless of what megapixel setting you use. So changing the megapixel size does not in any way alter the amount of signal (captured light) vs. noise that the camera's processor has to work with when creating the resulting jpeg.
That said, downsampling an image file to a lower resolution CAN result in an image with less apparent noise. This does usually require more sophisticated sampling algorithms than most cameras can easily handle. Even if the camera's processors could handle it, most manufacturers just don't put that much effort into minor features on their compact camera line. So I wouldn't expect the in-camera downsampling when you set a lower megapixel setting to do a good job at reducing apparent noise.
Further, note that this is only true, in the end, for apparent noise. A well-downsampled file will look "cleaner" close up, but will also lose some detail. Viewing prints at equal sizes, they'll be identical at smaller sizes while at larger sizes the full-resolution print will have better detail along with slightly more noise. There's only so much these sampling tricks can do at this point; to really get lower noise, the sensor itself has to be capturing light more efficiently (mostly via better sensel design, as gapless microlenses and other innovations now mean that smaller pixels don't lose significant light relative to larger pixels, making pixel size pretty much irrelevant) or reducing the noise generated by the sensor's circuitry and in the image data pipeline. This is why noise keeps going down, even as pixel counts go up. Sadly, using a lower megapixel setting does not do any of these things.
So to best reduce noise in your images, capture full size with as little compression as possible (or RAW if your camera lets you), then use a program with good noise reduction. There are quite a few available, some with free versions (I generally just run raw in lightroom). After that you can downsample to a lower resolution if you want, but it helps less and potentially reduces detail more as compared to a normal noise-reduction program.
The main reason for offering lower quality options is to save space on the memory card when you are taking photos if you don't need the extra quality. It doesn't make any physical alterations to the sensor, but it does cause a downscaling algorithm to be used to reduce the image from the native resolution of the camera to the more limited resolution.
While this doesn't physically change the sensor, it does result in a larger surface area being used per pixel in the final image. If proper scaling is used, this will reduce noise and can potentially increase useable low light capability. There is no reason that you have to do this in camera though, particularly if you have shooting RAW as an option on your camera. If you only have JPEG, there may be a slight advantage to the scaling algorithm in camera, but generally you will get a lot of the benefit done in camera or in post production.
No, changing the setting doesn't affect anything on the sensor itself. It will still be at 12 Mp (or whatever the largest resolution of your camera is), but is then scaled down after the image has been read from the sensor. That said, the option isn't entirely a gimmick; shooting at lower resolution will mean:
- There's less data to write to the card, so your camera will be quicker to respond after taking a shot, or particularly after a burst of shots.
- The images are smaller so you can transfer them quicker - may be useful if you're sending them over 3G or some other low bandwidth connection.
- You can fit more images on a memory card. Not generally a problem these days, but may be useful in some extreme circumstances.
If none of the above applies to you, you should probably always shoot at the highest resolution; you never know when you might want to crop an image down or print something bigger than 6"x4".
The only slight exception to the rule are the few cameras (the Panasonic Lumix DMC-LX7 being one I know of) where you can change between 3:2 and 4:3 aspect ratios without cropping - both the 3648 x 2736 (10.0 Mp) and 3776 x 2520 (9.5 Mp) modes on the LX7 are using the sensor at native resolution, but taking differently shaped rectangular slices from the sensor.
One final note: none of this is specific to a point and shoot; exactly the same applies to interchangeable lens cameras as well - my SLR gives me the option of shooting in "small" size. I've never used it though!