Hidden hunger is a global issue that affects an astounding 2 billion people, demanding targeted interventions for better resource allocation. However, conventional methods for identifying high‐prevalence areas often prove impractical in developing countries. This study introduces a cost‐effective and practical approach to detecting hidden hunger, combining household budget data with health surveys and applying these methods to Madagascar. By using small‐area estimation techniques, the study achieves precise commune‐level estimates, addressing the limitations of survey data representativeness. The findings challenge poverty‐based targeting, revealing that 17.9% of stunted children belong to non‐poor households. Additionally, 21.3% of non‐stunted children are found in impoverished households, supporting Sen's argument that malnutrition extends beyond destitution. The analysis further highlights key commune‐level determinants of hidden hunger, including access to healthcare, improved roads, telecommunication networks and productive agricultural activities.