![]() Pareto noticed that approximately 80% of Italy's land was owned by 20% of the population. Pareto's observation was in connection with population and wealth. It is an adage of business management that "80% of sales come from 20% of clients". Many natural phenomena distribute according to power law statistics. Mathematically, the 80/20 rule is roughly described by a power law distribution (also known as a Pareto distribution) for a particular set of parameters. The Pareto principle is only tangentially related to the Pareto efficiency. ![]() In his first work, Cours d'économie politique, Pareto showed that approximately 80% of the land in the Kingdom of Italy was owned by 20% of the population. Juran developed the concept in the context of quality control and improvement after reading the works of Italian sociologist and economist Vilfredo Pareto, who wrote about the 80/20 connection while teaching at the University of Lausanne. Other names for this principle are the 80/20 rule, the law of the vital few, or the principle of factor sparsity. ![]() The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes (the "vital few"). 20% of the donors contributing towards 80% of the total The Pareto principle may apply to fundraising, i.e. ![]()
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