Advances in multi-satellite based observations of the earth system have provided the capacity to retrieve information across a wide-range of land surface hydrological components and provided an opportunity to characterize terrestrial processes from a completely new perspective. Given the spatial advantage that space-based observations offer, several regional-to-global scale products have been developed, offering insights into the multi-scale behaviour and variability of hydrological states and fluxes. However, one of the key challenges in the use of satellite-based products is characterizing the degree to which they provide realistic and representative estimates of the underlying retrieval: that is, how accurate are the hydrological components derived from satellite observations? The challenge is intrinsically linked to issues of scale, since the availability of high-quality in-situ data is limited, and even where it does exist, is generally not commensurate to the resolution of the satellite observation. Basin-scale studies have shown considerable variability in achieving water budget closure with any degree of accuracy using satellite estimates of the water cycle. In order to assess the suitability of this type of approach for evaluating hydrological observations, it makes sense to first test it over environments with restricted hydrological inputs, before applying it to more hydrological complex basins. Here we explore the concept of hydrological consistency, i.e. the physical considerations that the water budget impose on the hydrologic fluxes and states to be temporally and spatially linked, to evaluate the reproduction of a set of large-scale evaporation (E) products by using a combination of satellite rainfall (P) and Gravity Recovery and Climate Experiment (GRACE) observations of storage change, focusing on arid and semi-arid environments, where the hydrological flows can be more realistically described. Our results indicate no persistent hydrological consistency in these environments, suggesting the need for continued efforts in improving satellite observations, particularly for the retrieval of evaporation, and the need to more directly account for anthropogenic influences such as agricultural irrigation into our large scale water cycle studies.