This document analyzes the perceptual evaluation of audio quality (PEAQ) model using wavelet decomposition techniques instead of traditional Fast Fourier Transform (FFT) methods. It explores how audio compression can exploit the psychoacoustic properties of human hearing, specifically using techniques like wavelet tree and wavelet packet decompositions to improve masking threshold estimates for sub-bands. Experimental results indicate that the proposed wavelet-based methods provide superior masking energy estimates compared to the FFT, enhancing data compression in audio coding.