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Pareto Chart
The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of
factor sparsity)[1] states that, for many events, roughly 80% of the effects come from 20% of the
causes.[2] Management consultant Joseph M. Juran suggested the principle and named it after
Italian economist Vilfredo Pareto, who, while at theUniversity of Lausanne in 1896, published his first
paper "Cours d'économie politique." Essentially, Pareto showed that approximately 80% of the land
in Italy was owned by 20% of the population; Pareto developed the principle by observing that 20%
of the peapods in his garden contained 80% of the peas.[3]
It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients."
With respect to this article, 80% of the value will come from 20% of the content. Mathematically, the
80–20 rule is roughly followed by a power law distribution (also known as a Pareto distribution) for a
particular set of parameters, and many natural phenomena have been shown empirically to exhibit
such a distribution.[4]
The Pareto principle is only tangentially related to Pareto efficiency. Pareto developed both concepts
in the context of the distribution of income and wealth among the population.
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