Summary: We give an analytical model of the compression error of down-sampled compression based on wavelet transform, which explains why down-sampling before compression can improve coding performance. And we approximate the missing details due to down-sampling and compression by using the linear combination of a set of basis vectors with $L_{1}$ norm. Then we propose a down-sampled and high frequency information approximated coding scheme and apply it to natural images, and achieve gains of both subjective quality and objective quality compared with JPEG2000.