A demodulation algorithm based on the birefringence dispersion characteristics for a polarized low-coherence interferometer is proposed. With the birefringence dispersion parameter taken into account, the mathematical model of the polarized low-coherence interference fringes is established and used to extract phase shift information between the measured coherence envelope center and the zero-order fringe, which eliminates the interferometric ambiguity of locating the zero-order fringe. A pressure measurement experiment using an optical fiber Fabry–Perot pressure sensor was carried out to verify the effectiveness of the proposed algorithm. The experiment result showed that the demodulation precision was 0.077 kPa in the range of 210 kPa, which was improved by 23 times compared to the traditional envelope detection method.
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