While Lai Chau is one of many poverty-hit Vietnamese localities, a recent study found that statistically it is more expensive to live in the northern mountainous province than in Hanoi.

The Vietnamese capital was chosen as the 'base city' for the calculation of the 2015 Spatial Cost of Living Index (SCOLI) by the General Statistics Office, according to results released on Thursday.

According to the methodology, the cost of living in the 'base city' is expressed as 100 and the cost of living in each destination is indexed against this number.

Lai Chau, some 420km northwest of the capital, had a SCOLI score of 100.3 percent, meaning it is 0.3 percent more expensive to live there than in Hanoi.

Do Thi Ngoc, deputy head of price statistics at the General Statistics Office, said the geographical location of Lai Chau might explain why it is pricier to live there than in any other Vietnamese province.

The traffic system in the mountainous province is rough, making it hard for goods to flow through the area. Meanwhile, its production sector has a limited capacity, according to the official.

With poorly developed production that fails to meet local demand, people are forced to buy goods from other localities which can get very expensive due to high transportation costs, Ngoc elaborated.

“The cost of living in Lai Chau is therefore higher than localities in flat areas. The same goes for all northern mountainous provinces,” Ngoc said.

This explains why Son La, Lao Cai and Dien Bien, all mountainous provinces in the north, took the next three spots after Lai Chau and Hanoi in the 2015 SCOLI.

Ho Chi Minh City is the sixth most expensive locality, with a SCOLI of 97.39 percent, whereas the Mekong Delta province of Tra Vinh had the lowest index, 80.72 percent.

According to the General Statistics Office, Ho Chi Minh City posted a cheaper cost of living compared to Hanoi thanks to a number of price stabilization programs which have kept the prices of essential commodities such as food, clothing, and beverages from skyrocketing.

The 2015 SCOLI measured the difference in cost of living between Hanoi and 62 other cities and provinces, and across six regions, including the Red River Delta in the north, the Mekong Delta in the south, the Central Highlands, and the central coast.

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