Distinction between drought and aridity is crucial to understand water scarcity processes. Drought indices are used for drought identification and drought severity characterisation. The Standardised Precipitation Index (SPI) and the Palmer Drought Severity Index (PDSI) are the most known drought indices. In this study, they are compared with the modified PDSI for Mediterranean conditions (MedPDSI) and the Standardised Precipitation Evapotranspiration Index (SPEI). MedPDSI results from the soil water balance of an olive crop, thus real evapotranspiration is considered, while SPEI uses potential (climatic) evapotranspiration. Similarly to the SPI, SPEI can be computed at various time scales. Aiming at understanding possible impacts of climate change, prior to compare the drought indices, a trend analysis relative to precipitation and temperature in 27 weather stations of Portugal was performed for the period 1941 to 2006. A trend for temperature increase was observed for some weather stations and trends for decreasing precipitation in March and increasing in October were also observed for some locations. Comparisons of the SPI and SPEI at 9- and 12-month time scales, the PDSI and MedPDSI were performed for the same stations and period. SPI and SPEI produce similar results for the same time scales concerning drought occurrence and severity. PDSI and MedPDSI correlate well between them and the same happened for SPI and SPEI. PDSI and MedPDSI identify more severe droughts than SPI or SPEI and identify drought occurrence earlier than these indices. This behaviour is likely to be related with the fact that a water balance is performed with PDSI and MedPDSI, which better approaches the supply-demand balance.

A better knowledge of droughts is required to improve water management in water scarce areas. To appropriately cope with droughts, there is the need to adopt adequate concepts relative to droughts and water scarcity, to properly use drought indices that help characterize them, including ones relative to their severity, and to develop prediction tools that may be useful for early warning and that may reduce the respective lead time needed for appropriate response. In this paper, concepts relative to drought and other water scarcity regimes are discussed aiming both to distinguish droughts from other water scarcity regimes and to base a common understanding of the general characteristics of droughts as hazards and disasters. Three main drought indices are described aiming at appropriate characterization of droughts: the theory of runs, the Palmer Drought Severity Index (PDSI), and the Standardized Precipitation Index (SPI). Their application to local and regional droughts in the region of Alentejo, Portugal is presented focusing on the respective comparison and possible adequateness for drought monitoring. Results indicate some difficulties in using the theory of runs, particularly because it requires a subjective definition of thresholds in precipitation and does not provide a standardized classification of severity. Results show that draught characterization with the PDSI and the SPI produce coherent information, but the PDSI is limited relative to the SPI because it requires more data to perform a soil water balance while the SPI needs only precipitation data, which are more easily available in numerous locations. It is concluded that adopting the SPI is appropriate, but there is advantage in combining different indices to characterize droughts.