Something that will complicate the effects is that money given to people may increase not only consumption today but also consumption tomorrow through investment. This could be investments in physical capital (e.g. iron roof, livestocks) or human capital (e.g. health and education). Most of the time when people are given money, some will be consumed and some saved/invested (and consumption itself could have investment effects too, if better nutrition improves ability to work/learn), e.g. see Give Directly recipients.
This is relevant if we think that, for instance, poor people in Kenyan villages have more profitable investment opportunities than poor people in the US, for the cash they receive—which is probably the case, e.g. there are many more opportunities to start small businesses in Kenyan villages (or higher returns to improving nutrition because they start at such a low level, though I remember “Poor Economics” says there’s not much of evidence for a nutrition-based poverty trap, so probably not). In that case the benefits of giving cash to poor Kenyans (relative to giving to poor Americans) is further amplified. In fact in GiveWell’s cost-effectiveness calculation for Give Directly, future increase in consumption is responsible for a substantial fraction of the effect (even with discounting) if we assume some persistence in investment returns (even if it’s not compounded).
Something that will complicate the effects is that money given to people may increase not only consumption today but also consumption tomorrow through investment. This could be investments in physical capital (e.g. iron roof, livestocks) or human capital (e.g. health and education). Most of the time when people are given money, some will be consumed and some saved/invested (and consumption itself could have investment effects too, if better nutrition improves ability to work/learn), e.g. see Give Directly recipients.
This is relevant if we think that, for instance, poor people in Kenyan villages have more profitable investment opportunities than poor people in the US, for the cash they receive—which is probably the case, e.g. there are many more opportunities to start small businesses in Kenyan villages (or higher returns to improving nutrition because they start at such a low level, though I remember “Poor Economics” says there’s not much of evidence for a nutrition-based poverty trap, so probably not). In that case the benefits of giving cash to poor Kenyans (relative to giving to poor Americans) is further amplified. In fact in GiveWell’s cost-effectiveness calculation for Give Directly, future increase in consumption is responsible for a substantial fraction of the effect (even with discounting) if we assume some persistence in investment returns (even if it’s not compounded).