If the statement applies to all digital cameras, it is not correct - sorry.
It does not apply to cameras where the sensor output is amplified according to the ISO setting before being input to the ADC. Therefore, it is incorrect for most digital cameras.
For the latest Sony, Canon, Nikon, and Leica cameras (all the latest digital cameras?), there is very little or no penalty when "underexposing" by keeping the ISO a few stops lower than the maximum possible while keeping the exposure unchanged.
ETTR makes sense for base ISO and raw histograms are necessary when applying ETTR. Otherwise, the JPEG histograms are good enough.
So, "We do not need raw histograms when shooting" would also be true. I withdraw my response/
When Sigma introduced an AFE into some models, there was a lot of whining about blown highlights compared to the sensor headroom provided by non-AFE models. My SD9 ISO "knob" remains super-glued at 100 ... LOL.
'Fake ISO' is a little misleading. These settings in general conform to 12232 - they might not allow enough headroom for a full brightness range, but 12232 doesn't specify how much headroom there should be. Some Panasonics had negative headroom at base ISO.
Over the years I've taken my share of grief for calling them that. I remain unrepentant.
On the Sony a7RIV, when you select iSO 50, it gives you the same raw file as if you had picked ISO 100, and it dims the image in the finder and the JPEG preview image and makes the histogram lie to you. It also tells the raw developer to pull the image by a stop. You could get the same raw file by just setting the EC to overexpose by a stop.
It gets worse. On the Sony a7RIV, when you select iSO 80, it gives you the same raw file as if you had picked ISO 160! When you select iSO 64, it gives you the same raw file as if you had picked ISO 125!
I assume this was the definition of 'exposure'. Consider the definition of exposure that most will be taught at photography school, H=E*t. Here 'H' is exposure, 'E' is image plane illuminance, often called more simply 'intensity', and 't' is exposure time. E*t is usually explained as an 'amount of light', but lets think a bit more carefully. 'Intensity' doesn't refer to an amount of light, it refers to how intense is the flow of light, that is the amount of light per unit area, so in fact exposure is amount of light per unit area.
We can also come to the same conclusion using a units analysis. The SI unit of luminance or intensity is the lux, so the unit of exposure is lux seconds, directly from the equation above. If you look up your SI units, you find that the lux is a name for lumens per square metre. so in other terms the unit of exposure is lumen seconds per square metre.
You can carry on this type of units analysis. You find that the lumen is the unit of luminous power (which is why light bulbs are now rated in lumens). High school physics tells you that power * time = energy, so exposure is luminous energy per square metre (or any other unit area, if you adjust all the units appropriately).
For the latest Sony, Canon, Nikon, and Leica cameras (all the latest digital cameras?), there is very little or no penalty when "underexposing" by keeping the ISO a few stops lower than the maximum possible while keeping the exposure unchanged.
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Interesting how things change. In my world, lowering the ISO increases the sensor exposure, not "underexposes". But then, in my world, it is not possible to change the ISO without changing the exposure ... the sensor exposure, that is.
Lowering ISO does not change exposure if you keep exposure fixed, as I wrote above.
Lowering ISO can increase exposure if you let the camera change the exposure automatically.
On your camera, I assume ... definitely not on mine ...
Anyway, it does seem that "exposure" to you means something different than sensor exposure i.e. ISO's meaning thereof. so I'll get out of your hair and back off.
It does on a a Sony, Nikon, Leica, Canon .... What camera do you have where with constant shutter speed and constant aperture the exposure changes with ISO?