dB or DN for image processing?

totally depends on your subject:

If you just want to classify water bodies you can leave intensities. But you would surely get better contrasts when converting to Sigma0 db.

If you want to perform operations on multiple images I generally advise calibration because it removes acquisition-dependent bias (e.g. incidence angle).

If you want to detect urban areas you wouldn’t convert to db as the contrasts of bright areas are much clearer in the non-logarithmised image.

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