About the NDVI process
The Normalized Difference Vegetation Index (NDVI) is a standardized index allowing you to generate an image displaying greenness (relative biomass). This index takes advantage of the contrast of the characteristics of two bands from a multispectral raster dataset—the chlorophyll pigment absorptions in the red band and the high reflectivity of plant materials in the near-infrared (NIR) band.
An NDVI is often used worldwide to monitor drought, monitor and predict agricultural production, assist in predicting hazardous fire zones, and map desert encroachment. The NDVI is preferred for global vegetation monitoring because it helps to compensate for changing illumination conditions, surface slope, aspect, and other extraneous factors (Lillesand 2004).
The differential reflection in the red and infrared (IR) bands enables you to monitor density and intensity of green vegetation growth using the spectral reflectivity of solar radiation. Green leaves commonly show better reflection in the near-infrared wavelength range than in visible wavelength ranges. When leaves are water stressed, diseased, or dead, they become more yellow and reflect significantly less in the near-infrared range. Clouds, water, and snow show better reflection in the visible range than in the near-infrared range, while the difference is almost zero for rock and bare soil. The NDVI process creates a single-band dataset that mainly represents greenery. The negative values represent clouds, water, and snow, and values near zero represent rock and bare soil.
The equation that the ArcGIS Image Server uses to generate the output is as follows:
NDVI = arctangent((IR – R)/(IR+R))
IR = pixel values from the infrared band
R = pixel values from the red band
This produces a single-band dataset, mostly representing greenness, where any negative values are mainly generated from clouds, water, and snow, and values near zero are mainly generated from rock and bare soil. This index outputs values between -1.0 and 1.0. Very low values of NDVI (0.1 and below) correspond to barren areas of rock, sand, or snow. Moderate values represent shrub and grassland (0.2 to 0.3), while high values indicate temperate and tropical rainforests (0.6 to 0.8) (Ref: http://earthobservatory.nasa.gov/Library/MeasuringVegetation).
Below are examples of a Landsat 7,4,3 band combination (left) and an NDVI using a color map that highlights the agricultural activity of the area (right).
Adding the arctangent to the standard NDVI equation allows ArcGIS Image Server to scale the output NDVI pixel values to improve the appearance of the displayed image.
Even though the NDVI formula has an output of -1.0 to 1.0, the NDVI process scales this output to 0 to 255, thereby creating a one-band 8-bit output image. You might need to enter scale and offset values to create the value range you will be using with a color map.
References
Chen, Zhikang, et al., "Vegetation Change Detection Using High Spectral Resolution Vegetation Indices,"Remote Sensing Change Detection: Environmental Monitoring Methods and Applications, R. S. Lunetta and C. D. Elvidge (Eds.), (pp. 181–190). Ann Arbor Press, Chelsea, Michigan,1998.
Lillesand, T. M., et al., Remote Sensing and Image Interpretation, fifth edition. John Wiley & Sons, Inc., New York, New York, 2004.
Piwowar, J. M., "Digital Image Analysis, Remote Sensing for GIS Managers, S. Aronoff (Ed.), (pp. 287–335). ESRI Press, Redlands, California, 2005.