SPI and SPEI drought indices

SPI and SPEI are two ways of stating, in a single number, how dry a period is compared with what a station usually sees. The SPI comes from McKee, Doesken and Kleist at Colorado State University in 1993. You take the rainfall total over a rolling window (one, three, six or twelve months), fit a gamma distribution to the history, then map the resulting probability onto a standard normal distribution. An SPI of -1 marks moderate drought, -1.5 severe drought, -2 extreme drought. The World Meteorological Organization endorsed it as the reference index for meteorological drought, with a user guide published in 2012. The SPEI, proposed by Vicente-Serrano, Beguería and López-Moreno in 2010, applies the same mechanics to the balance of rainfall minus potential evapotranspiration. It therefore sees heat, which the SPI ignores: summer 2022 in Europe read more severe on the SPEI than on the SPI across much of the continent. For the underwriter, the appeal is comparability: a -1.5 in Valladolid and a -1.5 in Niamey carry the same theoretical frequency, which simplifies pricing a portfolio. The flip side is basis risk. The choice of window (SPI-3 tied to flowering or SPI-6 to the season) matters as much as the strike, and the length of the calibration series shifts the quantiles. Both indices standardize by station: they say nothing about the insured's soil water capacity or irrigation.