Demand-Side Heterogeneity in Cash Transfers: The Influence of Planning Horizons on Food Consumption

Abstract

Cash Voucher Assistance (CVA) is widely used in humanitarian response as it offers flexibility and lower operational requirements than in-kind aid. However, the same transfer amount can translate into different outcomes depending on how recipients allocate cash across competing needs. A key challenge is how humanitarian organizations should design cash transfer programs when recipients face heterogeneous constraints and trade-offs that shape spending behavior. Using 2.3 years of transaction data from a CVA program for Venezuelan transit migrants (313,244 transactions from 18,847 recipients groups), we investigate how remaining travel distance influences food purchases, measured by total calories and nutritional composition. We exploit an exogenous increase in transfer value, and find that recipients farther from their destination purchase fewer calories and less nutritious baskets, despite intuitively greater food needs. Giving a higher cash amount generate larger improvements for farther-away recipients, consistent with distance-dependent planning horizons intensifying budget constraints and inducing trade-offs away from food. We further show that providing transportation in-kind, a highly prioritized need, alleviates food trade-offs even when the cash value is lower, highlighting interactions between aid modalities. Our findings demonstrate that the effectiveness of cash transfers depends critically on recipient context and behavior, not only on transfer size. More broadly, the study shows how incorporating demand-side behavior into humanitarian operations design can improve resource allocation and service effectiveness in mobile, resource-constrained environments.