A reliable network of rain gauges is a crucial component of rainfall estimation in a watershed. To provide a better evaluation method for rain-gauge networks, a new evaluation method using average inter-gauge correlation coefficients (averaged CC) for estimating an effective radius for each rain gauge was developed. In this study, averaged CCs were obtained from the values of inter-gauge correlation coefficients after choosing a minimum number of rainfall data sets as a threshold. The Nam River Basin (2400 km²) and its 24 rain gauges were selected with 8 years (2003 - 2010) rainfall data to validate a new evaluation method. In the spatial correlation coefficient fitting process for generating correlation distances, averaged CCs increased fitness accuracy (maximum 37%) in terms of coefficient of determination (R²) compared with a commonly used method (the last value of the inter-gauge correlation coefficient as the number of data sets is increased: last CC). In the evaluation of effective radii for 8 years, the robustness of the averaged CCs was supported by lower standard deviations for all rain gauges. For the optimum coverage of rainfall estimation in terms of effective radius, the Nam River Basin requires 20 rain gauges. Investigation of altitude effects presented that the effective radii were minimally influenced by the altitude of rain-gauge locations for this area.