Water Resour Manage (2011) 25:1087–1101 DOI 10.1007/s11269-010-9665-1 A Water Balance Derived Drought Index for Pinios River Basin, Greece Lampros Vasiliades · Athanasios Loukas · Nikos Liberis Received: 14 November 2009 / Accepted: 3 May 2010 / Published online: 19 May 2010 © Springer Science+Business Media B.V. 2010 Abstract This study estimates hydrological drought characteristics using a water balance derived drought index in Pinios river basin, Thessaly, Greece. The concept of hydrological management at subwatershed scale has been adopted because it encom- passes the areal extent of a drought event. Fourteen (14) sub-watersheds of Pinios river basin were delineated according to the major tributaries of Pinios river using GIS. For the assessment of hydrological drought, because none of the sub-watersheds have flow gauge stations at their outlets, a six-parameter monthly conceptual water balance model (UTHBAL model), has been applied regionally to simulate runoff for the period October 1960–September 2002. The synthetic runoff was normalized through Box-Cox transformation and standardized to the mean runoff to produce the water balance derived drought index for hydrological drought assessment. The standardized precipitation index (SPI) at multiple time scales and four indices of the Palmer method (i.e. PDSI, WPLM, PHDI and the Palmer moisture anomaly Z-index) were also calculated to assess hydrological droughts. The results showed that the water balance derived drought index is a good indicator of hydrological drought in all sub-watersheds, since is capable to quantify drought severity and duration. Furthermore, the drought index provides guidance on the selection of an appropriate meteorological drought index for operational hydrological drought monitoring. Hence, SPI at 3- and 6-month timescales and the WPLM could be used along with the water balance derived drought index in risk and decision analyses at the study area. Part of this paper has been presented at EWRA’s 7th International Conference on Water Resources Conservancy and Risk Reduction Under Climatic Instability and it is submitted for review and possible publication in a Special Issue of the Journal of Water Resources Management (WARM). L. Vasiliades (B ) · A. Loukas · N. Liberis Department of Civil Engineering, University of Thessaly, Pedion Areos, 38334 Volos, Greece e-mail: lvassil@uth.gr URL: http://civ.uth.gr