It is well-known that in stereoscopic 3D video systems humans perceive good quality 3D video as long as one of the eyes sees a high quality view. Hence, in stereo video encoding/streaming, best rate allocation between views can be addressed by reduction of the spatial resolution, frame rate, and/or quantization parameter of the second view with respect to the first view. In this paper, we address selection of the rate allocation strategy between views for our recently developed scalable multi-view video codec (SMVC)  to obtain the best rate-distortion performance. Since 3D video quality perception does not correlate well with the overall PSNR of the two views, we propose a new quantitative measure for stereo video quality as weighted combination of two PSNR values and a jerkiness measure. The weights are determined by means of correlating subjective quality test results and the objective measure scores on a set of test videos. DSCQS test methodology is used for subjective evaluation of stereo videos. Experimental results are presented to demonstrate how the objective and subjective 3D video quality varies for different choices of rate allocation between the views.