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Reflectance data are often preferred to radiance data in applications of multispectral and hyperspectral imagery in which subtle spectral features are analyzed. In such applications, atmospheric correction, the process which provides radiance-to-reflectance conversion, plays a prominent role in the data-distribution and archiving pipeline. Lossy compression, often in the form of the JPEG2000 standard, will also likely factor into the distribution and archiving data flow. The relative position of data compression with respect to atmospheric correction is considered and evaluated with experimental results on both multispectral and hyperspectral imagery, and recommendations on an appropriate order for compression in the data-flow chain are made.