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The Pareto Principle

17 Feb 2004 by Matthew Linderman

The history of the 80-20 Rule: Vilfredo Pareto (1848-1923) was an Italian economist who, in 1906, observed that twenty percent of the Italian people owned eighty percent of their country’s accumulated wealth. Over time, this theory came to be called Pareto’s Principle. It states that a small number of causes is responsible for a large percentage of the effect, in a ratio of about 20:80.

9 comments so far (Post a Comment)

17 Feb 2004 | Brad Hurley said...

This rule is discussed in Universal Principles of Design by Lidwell, Holden, and Butler.

They give a few examples of the 80/20 rule:

80 percent of a product's usage involves 20 percent of its features.

80 percent of a town's traffic is on 20 percent of its roads.

80 percent of a company's revenue comes from 20 percent of its products.

80 percent of innovation comes from 20 percent of the people.

80 percent of progress comes from 20 percent of the effort.

80 percent of errors are caused by 20 percent of the components.

We can all think of instances in which it doesn't apply, but as a general rule it holds suprisingly well.

17 Feb 2004 | Charbel said...

I'm a strong believe that 80% of your life is affected by 20% of your decisions...

17 Feb 2004 | mike said...

20% of sites are responsible for 80% of google returns? I don't think my feeble brain can even fathom the equation, but somehow I doubt that :D

17 Feb 2004 | Colin said...

How about 20% of features constitute 80% of use.

17 Feb 2004 | Ryan Schroeder said...

Did you just get the mailing from veer that mentioned this?

17 Feb 2004 | Tim said...

80% of life is dictated by 20% of the principles...

17 Feb 2004 | Carl said...

80% of live sucks. 15% more sort of sucks. 5% is amazing.

18 Feb 2004 | petrichor said...

But, most of the time, isn't it the other 20% that usually matters?

19 Feb 2004 | Nate Balditch said...

Vilfredo Pareto also contributed what is now Pareto Optimality, explained here. A useful expression for those of us who talk about zero-sum games.

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