The Retinex theory assumes that large intensity changes correspond to reflectance edges, while smoothly-varying regions are due to shading. Some algorithms based on the theory adopt simple thresholding schemes and achieve adequate results for reflectance estimation. In this paper, we present a practical reflectance estimation technique for hyperspectral images. Our method is realized simply by thresholding singular values of a matrix calculated from scaled pixel values. In the method, we estimate the reflectance image by measuring spectral similarity between two adjacent pixels. We demonstrate that our thresholding scheme effectively estimates the reflectance and outperforms the Retinex-based thresholding. In particular, our methods can precisely distinguish edges caused by reflectance change and shadows.