PARETO PRINCIPLE

In 1906, economist Vifred Pareto developed the 80:20 rule which states that 80% of effects come from 20% of the causes. Pareto came to this conclusion after observing 80% of the land in his hometown was owned by only 20% of the population.

Examples of the 80:20 Rule

• 80% of television is watched on 20% of the channels
• 80% of software problems are caused by 20% of the bugs
• 80% of sales come from 20% of customers
• 20% of society holds 80% of the wealth
• 20% of your wardrobe is worn 80% of the time