Video is an important medium in terms of information sharing in this present era. The tremendous growth of video use can be seen in the traditional multimedia application as well as in many other applications like medical videos, surveillance video etc. Raw video data is usually large in size, which demands for video compression. In different video compressing schemes, motion vector is a very important step to remove the temporal redundancy. A frame is first divided into small blocks and then motion vector for each block is computed. The difference between two blocks is evaluated by different cost functions (i.e. mean absolute difference (MAD), mean square error (MSE) etc).In this paper the performance of different cost functions was evaluated and also the most suitable cost function for motion vector estimation was found.