Vegetation studies using NOAA-AVHRR data hove tended to focus on the u
se of the normalized difference vegetation index (NDVI). This unitless
index is computed using near-infrared and red reflectances, and thus
has both an accuracy and precision. This article reports on a formal s
tatistical framework for assessing the precision. of the NDVI derived
from NOAA-AVHRR observations. The framework is based on the ''best pos
sible'' precision concept, which assumes that signal quantization is t
he only source of observational error. While the radiance resolution o
f a spectral observation is essentially fixed by the instrument charac
teristics, the reflectance resolution is the radiance resolution divid
ed by the cosine of the solar zenith angle. Using typical solar zenith
angles for AVHRR image acquisitions over Australia, +/- 0.01 NDVI uni
ts is typically with ''best possible'' precision attainable in the NDV
I, although this degrades significantly over dark targets, and at larg
e solar zenith angles. Transforming the computed NDVI into a single by
te for disk storage results in little or no boss of precision. The fra
mework developed in this article can be adapted to estimate the ''best
possible'' precision of other vegetation indices derived using data f
rom other remote sensing satellites.