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Potential Evapotranspiration

The Palmer drought indices measure the balance between moisture demand and moisture supply. Drought results from an imbalance between these two components. Precipitation provides the water supply. Water demand is usually measured by evapotranspiration (the amount of water that would be evaporated and transpired by plants). There is a distinction made between potential evapotranspiration (PE) and actual evapotranspiration (AE). The Palmer model uses Thornthwaite's equations to estimate PE from temperature. PE is the demand or maximum amount of water that would be evapotranspired if enough water were available (from precipitation and soil moisture). AE is how much water actually is evapotranspired and is limited by the amount of water that is available. AE is always less than or equal to PE, so PE is used for the water demand component of the drought equation.

In the Palmer model, if the amount of precipitation (P) during the month is greater than PE for the month, then the leftover P soaks into the ground to recharge soil moisture, and any left over after that runs off as streamflow. If P is less than PE, then moisture has to be drawn out of the soil to meet the PE demand. Hotter temperatures result in greater PE which requires more P just to meet the greater demand. Climates where PE is always greater than P are termed arid climates. The American Southwest is a typical arid climate.