The 80/20 rule

The Pareto Principle, or the 80/20 rule, states that for many phenomena 80% of the result comes from 20% of the effort. The principle has been named after Vilfredo Pareto—an Italian economist—who, back in 1895, noticed that about 80% of Italy’s land belonged to 20% of the country’s population.

Upon discovering this inequality, Pareto surveyed other countries only to discover that wealth was distributed more or less in similar (dis)proportions everywhere.

It’s not a new concept that many natural as well as man-made phenomena are distributed unequally, or—to put it scientifically—according to a power-law distribution.

Truth be told, the Pareto principle isn’t that much different from the power-law distribution itself.

Just like Zipf’s law.

Often, the three concepts (power law, Pareto principle, and Zipf’s law) are confused as denoting three unrelated laws, but they can all refer to the same thing.

In essence, they tell us that most of the time things are distributed unevenly. And out of the three principles, the Pareto rule has become synonymous with the 80/20 distribution.