The geostatistical approach to the inverse problem is discussed with e
mphasis on the importance of structural analysis. Although the geostat
istical approach is occasionally misconstrued as mere cokriging, in fa
ct it consists of two steps: estimation of statistical parameters (''s
tructural analysis'') followed by estimation of the distributed parame
ter conditional on the observations (''cokriging'' or ''weighted least
squares''). It is argued that in inverse problems, which are algebrai
cally undetermined, the challenge is not so much to reproduce the data
as to select an algorithm with the prospect of giving good estimates
where there are no observations. The essence of the geostatistical app
roach is that instead of adjusting a grid-dependent and potentially la
rge number of block conductivities (or other distributed parameters),
a small number of structural parameters are fitted to the data. Once t
his fitting is accomplished, the estimation of block conductivities en
sues in a predetermined fashion without fitting of additional paramete
rs. Also, the methodology is compared with a straightforward maximum a
posteriori probability estimation method. It is shown that the fundam
ental differences between the two approaches are: (a) they use differe
nt principles to separate the estimation of covariance parameters from
the estimation of the spatial variable; (b) the method for covariance
parameter estimation in the geostatistical approach produces statisti
cally unbiased estimates of the parameters that are not strongly depen
dent on the discretization, while the other method is biased and its b
ias becomes worse by refining the discretization into zones with diffe
rent conductivity. Copyright (C) 1996 Elsevier Science Ltd