Estimating the precision or uncertainty associated with sensory signals is an important part of perception. Based on a previous computational model, we tested the hypothesis that increasing visual contrast increased the precision encoded in early visual areas by the gain or excitability of superficial pyramidal cells. This hypothesis was investigated using electroencephalography and dynamic causal modelling (DCM); a biologically constrained modelling of the cortical processes underlying EEG activity. Source localisation identified the electromagnetic sources of visually evoked responses and DCM was used to characterise the coupling among these sources. Bayesian model selection was used to select the most likely connectivity pattern and contrast-dependent changes in connectivity. As predicted, the model with the highest evidence entailed increased superficial pyramidal cell gain in higher-contrast trials. As predicted theoretically, contrast-dependent increases were reduced at higher levels of the hierarchy. These results demonstrate that increased signal-to-noise ratio in sensory signals produce (or are represented by) increased superficial pyramidal cell gain, and that synaptic parameters encoding statistical properties like sensory precision can be quantified using EEG and dynamic causal modelling.