Due to availability of various methods and since soil degradation often composed of many processes, its difficult to select the best method to be utilized in its determination.
your question is quite broad, the methodology for assessing soil degradation will depend on which kind of degradation do you want to focus on e.g. physical, chemical and so on. In addition, it will depend on the scale you want to work with and the kind of method you want to use, as in qualitative, quantitative or semi-quantitative.
Here goes one paper that focus on the models for predicting soil erosion and sediment yield:
We are trying to compare the degradation processes may it be physical, chemical and biological degradation. I want to focus in physical degradation because the result and the method is tangible to the farmer which I aimed to explain to them later. With this, soil erosion is the first option, compaction, aggregate destruction and so on.
Thanks for the paper you linked to me. It helped me a lot.
However, I did not deal with chemical degradation.
Another methodology that might be interesting for you is the Landscape function analysis, which is also fairly easy to do, cheap and it includes more indicators than the one that I used. However, the vegetation degradation will also depend on the scale and what to focus. In the sense that you could assess soil micro-fauna or o a bigger scale vegetation.
I highly recommend you to apply a model which would be convenient with remote sensing and geographic information system techniques. In this way, not only you can illustrate your results in the graphical format but also you can perform it for extend area. I apply universal soil loss equation diversely and they were really useful and close to real. You can find my original paper in my publication.
You could use remote sensed data on a suitable scale to assess the degradation with adequate ground truth for assessing the extent of soil degradation of a large area. We have done that for India on 1:50000 scale with the coordination by Natioonal Remote Sensing Centre, Department of Space. Please refere to the proceedings of the 8th Intl Soil Sci Congress hels at Izmir Turkey for one of my papers.