This paper quantitatively examines evidences on expenditure growth in Laos between 1997 and 2008 using the 1997 and 2008 Lao Expenditure and Consumption Survey data (LECS2 and LECS4). Results show that real per-capita expenditure of Lao PDR has increased by 802% during the period. Disaggregating into two groups we find that rural households have slightly higher real per-capita-expenditure growth rate than those of urban household with the rates being 832% and 777% respectively. Estimation of per-capita expenditure regressions for each of these two time points consistently show that education and village endowments have positive impact on per-capita expenditure. We then conduct decomposition a-la Neumark (1988) to find that vast majority of improvement is due to the growth in returns to social factors, not the growth in social factors themselves.