This paper studies the sources of expenditure inequality in Viet-nam, and its change over time, with a particular focus on the role of spatial factors. A novel inequality decomposition technique based onexpenditure regression is described, extended, and applied to house-hold survey data from Vietnam from the 1990s. This technique pro-vides factor inequality weights, defined as cov(^ßkxk, y)/s2(y), that arebased on income correlates of analytical interest including household characteristics and sub-group indicators.Location is found to account for a very substantial share of total inequality, even after controlling for household characteristics. Thisconclusion also holds once location of birth is used. Higher educationis also important for inequality, while assets including land matter lit-tle. This may be juxtaposed to popular theoretical models of inequalitythat emphasize asset-based inequality. Growing inequality during Viet-nam’s reform period appears to be caused by rising spatial inequalityas well as growing returns to higher education. Policy should strive tocreate the conditions for more equal returns to location.