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How are the algorithms for color ramps in ArcMap different?
ArcMap's three color ramp algorithms represent different methods for traversing the color spectrum. Each method provides slightly different effects, and which you use may depend on how well it suits your needs.
HSV: The HSV (Hue, Saturation, Value) method is a linear traverse of colors between pairs: Color1 H to Color2, Color1 S to Color2 S, and Color1 V to Color2 V. Essentially, all intervening colors are shown. The HSV algorithm was used for color ramps in ArcView 3.x and is perhaps the easiest color model to understand, but may not be the most intuitive for map reading purposes.
CIE Lab: This method blends two colors without traversing intervening hue space like HSV does. The result is a smooth progression from Color 1 to Color 2. In many cases this produces a very desirable smooth ramp between two colors. This algorithm takes the shortest path through the color spectrum. If you think of the color spectrum as a wheel of color progression, beginning and ending with red, colors are chosen among the shortest distance on the circumference of the wheel to create the color ramp. One deficiency in this algorithm is that sometimes the colors near the middle of the ramp can appear muddy when color 1 and color 2 are extremely different, that is, when approaching the maximum distance possible on the color wheel.
Lab LCh: This algorithm is very similar to the CIE Lab but does not seek the shortest path between colors. Instead it works similarly to the HSV model but softens the effect of color transition considerably.
To clearly see the effects of each algorithm, use the popup color palette in ArcMap, and assign 'Mango Orange' to color 1 and 'Delft Blue' to color 2; then try each algorithm.