A Needs-Based Model for Cash Transfer Value Determination: Towards Equitable Cash Assistance in Drought-Prone Regions

Abstract

<ns3:p>Background Cash transfer programmes have emerged as a critical tool for addressing food insecurity and economic vulnerability for poor households in drought-prone regions. However, majority of such programmes rely on standardized, flat-rate payments that fail to account for household-level variation in needs, composition and local context. This paper proposes a context specific model for determining cash transfer values tailored to household’s demographic and economic vulnerability, using minimum expenditure basket and household compositions. Approach Development of the model adopted the conceptual framework approach which helps to ensure that transfers are reasonable and responds to actual household needs, and is based on existing realities. The approach aims to support a more dignified and effective humanitarian response, reduce negative coping strategies and lay the foundation for long-term resilience-building in affected communities. Results A generic description of the model is presented alongside empirical scenarios for different household compositions and adequacy ratios demonstrating how cash values adjust according to household structure and coverage rates. The developed model provides a scalable and flexible framework for determining transfer amounts with the aim of improving targeting efficiency and equity. The developed model is useful to academicians, policy makers and social assistance practitioners. It offers methodological innovations including converting household members into adult equivalent units and incorporating economies of scale in devising equitable cash transfer values in a humanitarian context. However, future research is needed to explore hybrid models that combine needs-based approach with other income gap or geographical based approaches in order to facilitate administrative feasibility.</ns3:p>