The contribution of various physical sources of uncertainty affecting radar rainfall estimates at the ground is quantified toward deriving and understanding the error covariance matrix of these estimates. The focus here is on stratiform precipitation at a resolution of 15 km, which is most relevant for data assimilation onto mesoscale numerical models. In the characterization of the error structure, the following contributions are considered: (i) the individual effect of the range-dependent error (associated with beam broadening and increasing height of radar measurements with range), (ii) the error associated with the transformation from reflectivity to rain rate due to the variability of drop size distributions, and (iii) the interaction of the first two, that is, the term resulting from the cross correlation between the effects of the range-dependent error and the uncertainty related to the variability of drop size distributions (DSDs).For this purpose a large database of S-band radar observations at short range (where reflectivity near the ground is measured and the beam is narrow) is used to characterize the range-dependent error within a simulation framework, and disdrometric measurements collocated with the radar data are used to assess the impact of the variability of DSDs. It is noted that these two sources of error are well correlated in the vicinity of the melting layer as result of the physical processes that determine the density of snow (e.g., riming), which affect both the DSD variability and the vertical profile of reflectivity.