Which is better quality, a larger 480p video or a smaller 1080p video?
There is no concrete answer to this. It depends entirely on the content of the video. Video compression effectively looks for patterns in video. If lots of patterns can be found, then high compression can be achieved with high resolution and low but rate.   If the video is hard to find patterns though, then high compression results in altering the video to make patterns and this produces artifacts that distort the video. 

Reducing the resolution of the file in these cases allows for fewer artifacts since less alterations need to be made to the video to find a pattern. 

I'm over simplifying here with some technical inaccuracies to make it more accessible, but that is the general idea for compression. If the hd video doesn't have artifacts then the hd video is better, but the sd file is far less likely to have artifacts if similar codecs were used for both.