One of the most commonly asked questions when starting out is what quality setting should you use, or more specifically, should you use RAW or JPEG file format?
Like a lot of things, there is no easy answer. It is a choice based purely on the work flow you wish to use which is in turn based on the amount of post processing control you want to have over your image files.
First up some basics.
All images taken by all cameras, phones etc are RAW data to start with. RAW data is just that, data, not an image.
All useable images for printing, viewing and sharing are JPEG files (or similar such as TIFF’s), so the end product is the same (just the journey is different).
Choosing RAW format means you do not want the RAW to JPEG conversion to be done by the camera, (usually based on choices made pre-shot*), but want to do it yourself using a relevant RAW conversion programme.
JPEG files use the camera's pre-set settings to create the image*. JPEG files can be effectively anything you want within the limits of the settings available in your camera, but once taken, the JPEG becomes "fixed" and far less flexible for post processing. All unused data is discarded (literally dumped) to save space. RAW files can be up to 4 times the size of processed JPEG files.
*sharpening, colour saturation, tone, contrast, white balance, exposure and any special effects applied. None of these are applied in a RAW image with the assumption you will process to your needs. When you look at a RAW image on the camera screen or during processing, you are looking at a JPEG created for viewing called a thumb nail or preview image, not a full sized image.
The one on the camera back will also look like the camera's JPEG settings have been applied, while the one you upload into your RAW processing programme will often look flat and unexciting as it does not have any of the JPEG settings applied to it. It is a blank canvas waiting for you to process or to put it another way, it is an unbaked cake.
The JPEG is created from the RAW data to make a usable (or visual) file.
If the image is what you want or is close enough that minor fixes can perfect it, then you do not need to process a RAW image file. Many brands brag about the quality of their JPEG files and rightfully so, as they are the effort of many years of development.
If however you want to push the file a bit further, manipulate it or recover lost highlight or shadow detail from poor exposure, the RAW file has a lot more room for processing (all of the unused jellybeans are on "standby").
Below is a file badly over exposed, but recovered reasonably well in RAW. A JPEG file would be less successful as the lost detail would be out of it's range to retrieve.
In effect, you can only easily subtract from a JPEG, not add new data (without some serious photoshop work). For example you could successfully convert a colour JPEG into a black and white one (subtracting colour), but not the other way around.
Users of RAW will tell you that RAW processing is also gentler and more natural looking than the common JPEG file, but that is often in comparison to JPEG's straight out of the camera and is only noticeable at very high magnifications. The manufacturers put an enormous amount of effort and time into their JPEG processors on the assumption that many people will use them regularly or exclusively.
So, JPEG or RAW?
Still up to you, but here is a suggestion.
Use JPEG's anytime;
the images are safe to shoot as is (no difficult lighting, colour or dynamic range issues and you have had time to do test files if needed),
the images are to be done in bulk quantities and are not going to be manipulated,
you are using a special effect or look only available through the camera's JPEG settings,
it is only casual shooting,
you want an easy work flow (see below),
the file will not be enlarged to extreme sizes,
storage space is at a premium.
Use Raw if;
the files may need heavy manipulation to retrieve lost shadow or highlight data,
you intend to treat them like fine art images where the most complete control in processing is desired and big enlargements are desired,
you wish to explore the limits of the file creatively,
you may want to revisit the image now or later and develop it differently,
you do not know what you may need now or in the future (especially client images).
Use both if;
you have the space and are not sure which to use,
need a speedy turn around, but may need to fix errors on some files that JPEG's cannot handle,
would like a JPEG effect only the camera can provide, but would like the option of a clean file for later processing.
Once you have decided to use RAW or JPEG, your work flow can be established.
JPEG users will have the benefits of a file format that is not specialised RAW programme dependant and is smaller and "ready to go". Any device or computer can process and store the files and copies can be made as needed. For every 10 gb of storage you will be able to store 2-3,000 images and they are effectively future proof. This is why most low end devices and cameras are set to produce JPEG's only, as the decision to use RAW is really a photographers choice, not a casual shooters one.
Importing and sorting can be straight forward and posting to web sites etc a breeze.
RAW users have a couple of extra steps to make.
The RAW file must at some point go into a RAW processing programme (you can see the RAW image on your screen, but that is a preview JPEG only). The process could be as simple as importing to a programme using pre-set settings and exporting out as a useable file type (JPEG, TIFF etc) and some programmes give you the option of "batch" processing on import or after, but the point of using RAW is to be able to process images more precisely and to suit the intended purpose, so batch processing should only be seen as a starting point. The original RAW file should be left untouched for later processing*.
*This is very important. Some programmes such as Photoshop will process your RAW files permanently unless you first make a copy, while specialist RAW file processors like Lightroom, DXO, Capture 1, only ever processes a copy file, never touching the original so you can re-visit them as needed.
Storage is more problematic now as 10 gb only holds hundreds, not thousands of files and these are only accessible using a RAW processing programme. If you choose to shoot both RAW and JPEG, you get the best of both worlds, but your storage issues are greater and may require two steps.
Another long term issue is each RAW file type is specific to each model of camera (not brand). Eventually support of older models may drop away or the programme will only give passing support to them, although this has not happened yet. New models of camera can also suffer from lack of RAW support early in their life, leaving the user with JPEGs only for the first few months after release, unless you wish to chance the manufacturer's often clumsy and limited RAW processing programme supplied with the camera.
One solution is to convert and re-file your RAW images as DNG conversions. DNG or Digital Negative is a simple RAW storage file that Adobe created to help future proof RAW files. It's main down side is you need for an Adobe or Adobe sanctioned product to open them, but the base programme is deliberately very simple so in future it will be easily possible to resurrect it even if Adobe disappears.