The aim of this study is to investigate the impact of an early humanitarian response and resilience building on humanitarian outcomes in the Tigray and Somali regions of Ethiopia, both in terms of cost savings, as well as the avoided losses that can result from a more proactive response. The study investigates existing data and empirical evidence, and uses this to model the relative costs of different response scenarios. The impacts of drought on households are complex and interrelated, with spikes in need arising from a combination of physical changes to rainfall, fodder and vegetation, price changes in local markets, as well as other factors such as the quality of institutional response and conflict, for example. Further, high impacts of drought in one year can have strong effects on households’ abilities to cope in subsequent years. It is very hard to measure this complex web of interactions and outcomes empirically. Hence, this analysis combines empirical evidence with the Household Economy Approach (HEA) to model the potential impact of different response scenarios over 15 years, for a population of 8.7 million across 17 livelihood zones. The model is dynamic, allowing impacts in one year to carry forward into subsequent years, and hence gives a nuanced prediction of how different interventions may affect humanitarian need over time.