Abstract: This paper proposes to investigate inequality in Viet Nam from the point of view of a study of the urban/rural gap by means of a multilevel model. Using data from the Viet Nam Household Living Standards Survey of 2002, the paper constructs a multilevel model, yielding random effects in the urban/rural gap which can be seen as location-specific random contributions to the urban/rural gap above and beyond the effects of known location characteristics, such as the level of education of the population, etc. The paper also demonstrates how the multilevel model can be used to obtain small area estimates at the commune level.