The normalized difference vegetation index (NDVI) is a simple graphical indicator that can be used to analyze remote sensing measurements, typically but not necessarily from a space platform, and assess whether the target being observed contains live green vegetation or not.
Thus, NDVI was one of the most successful of many attempts to simply and quickly identify vegetated areas and their "condition," and it remains the most well-known and used index to detect live green plant canopies in multispectral remote sensing data. Once the feasibility to detect vegetation had been demonstrated, users tended to also use the NDVI to quantify the photosynthetic capacity of plant canopies. This, however, can be a rather more complex undertaking if not done properly.
References:
Deering, D.W. 1978. Rangeland reflectance characteristics measured by aircraft and spacecraft sensors. Ph.D. Diss. Texas A&M Univ., College Station, 338p.
Deering D.W., J.W. Rouse, Jr., R.H. Haas, and J.A. Schell. 1975. Measuring "forage production" of grazing units from Landsat MSS data, pp. 1169–1178. In Proc. Tenth Int. Symp. on Remote Sensing of Environment. Univ. Michigan, Ann Arbor.
Rouse, J.W., Jr., R.H. Haas, J.A. Schell, and D.W. Deering. 1973. Monitoring the vernal advancement and retrogradation (green wave effect) of natural vegetation. Prog. Rep. RSC 1978-1, Remote Sensing Center, Texas A&M Univ., College Station, 93p. (NTIS No. E73-106393)
Rouse, J. W., R. H. Haas, J. A. Schell, and D. W. Deering (1973) 'Monitoring vegetation systems in the Great Plains with ERTS', Third ERTS Symposium, NASA SP-351 I, 309-317.
Tucker, C.J. (1979) 'Red and Photographic Infrared Linear Combinations for Monitoring Vegetation', Remote Sensing of Environment, 8(2),127-150.
Nouri, H. S. Beecham, S., Anderson, P. Nagler (2014) High Spatial Resolution WorldView-2 Imagery for Mapping NDVI and Its Relationship to Temporal Urban Landscape Evapotranspiration Factors http://www.mdpi.com/2072-4292/6/1/580.
The NDVI and other measures from satellite images can be embedded in a general framework for crops health and yield analysis and estimation. Also the NDVI can be coupled with fracture analysis to search for groundwater in the basement complex areas. In general, it can be seen as a physical indicator for several applications.