The performance of space-time codes is evaluated in terms of diversity gain and coding gain, two measures which describe the worst-case pairwise error probability between codewords at high signal-to-noise ratio (SNR). We introduce the concept of effective coding gain to provide an estimate on the bit error rate (BER) at low-to-moderate SNR. This concept connects the number of nearest neighbours with degradation in error performance. We demonstrate the value of the new concept through analysis of space-time block codes for the quasi-static Rayleigh fading channel.