Drought is a natural hazard that inflicts costly damage to the environment and human communities. Although ample literature exists on the climatological aspects of drought, little is known on whether existing drought indices can predict the damages and how different human communities respond and adapt to the hazard. This project examines (1) whether existing drought indices can predict the occurrence of drought events and their actual damages; (2) how the adaptive capacity (i.e., resilience) varies across space; and (3) what public outreach and engagement effort would be most effective for mitigation of risk and impacts. The study region includes all 503 counties in Arkansas, Louisiana, New Mexico, Oklahoma, and Texas. This data set was created to examine the first objective of the project. The Palmer Drought Severity Index (PDSI) and Palmer Hydrological Drought Index (PHDI) data, available only at the climate-division level, were downscaled into county-level indices over the 1975-2010 period. The drought damage data, acquired from the Spatial Hazards Events and Losses Database for the United States (SHELDUSTM), were tabulated for the same time period. Statistical correlations were conducted between drought indices and drought damages to test whether these indices accurately represent the drought damage in the study region. This data set contains the two county-level drought indices and drought damage for the period 1975-2010, which should be useful to future related studies.