Skip to main content

Pareto’s Principle

PARETO PRINCIPLE

The world is not fair. It is extremely unequal. Some people get everything and others nothing. You know what the craziest part about this is?

This inequality is mathematical.


As absurd as this may sound, there is a phenomenon, rather “principle” to describe this, The Pareto Principle.

If I change my opening statement to, 20% of the people get 80% of everything and the others only 20% of everything this statement becomes a perfect example of Pareto’s Principle.

It may be clear already but the Pareto principle basically states that, for many events, roughly 80% of the effects come from 20% of the causes, and hence is also called the 80/20 rule.

I realize that so far this may be ambiguous. So let’s explain this the classical way, with examples!


Vilfredo Pareto

An economist (quite obviously the guy who demonstrated this principle) originally noted this effect in his garden. With peapods. Math doesn’t always have to be nerdy and theoretical. So moving on, he found that 80% of the peas were inside only 20% of the peas. Now when he probably told his fellow economists/ mathematicians I am sure he faced a lot of criticism and was openly ridiculed. Actually, that is probably an understatement. A guy who wants to prove a mathematical law by showing it practically? What an idiot! Till date, we still have to write down stupid proofs for quite obvious theorems because the examiners can’t see it in the diagram. I have even had to prove that every natural number is even or odd…
But nonetheless, that was the first actual example of the Pareto principle. Afterward when he realized that his “peapod example” wasn’t enough he moved on to more material things.

He showed that 20% of the people owned 80% of the land in Italy (yes the guy was Italian. A mathematician who isn’t Greek? What a minority!). People started to believe him.

The principle still stayed as an underappreciated one. But this all was back in 1896. But as time passed and more data became to be analyzed, the principle became more important and evident.

Income disparities

The most important application of this law is in income disparities. Till date whenever income surveys are conducted, people get all fussed up and seemingly shocked by the difference. In accordance with the Pareto Principle, the richest 20% of the world have about 82.7% of the world’s income (source: 1992 United Nations Development Program report)
.
Quite obviously figures like this come as a surprise. But on closer inspection, it is just math. It’s the Pareto Principle. So the next time somebody is criticizing this difference just tell them it’s math and tell them to read this article on our website. We definitely don’t self-advertise.


The beauty of math is there are no exceptions. This also holds true for the Pareto principle. Every large set of data having a comparison between two things ‘x’ and ‘y’ will show that 20% of x is directly linked to 80% of y.
  • 20% of software bugs are responsible for 80% of crashes, glitches, and malfunction.
  • 20% of hazards cause 80% of injuries and accidents.
  • 20% of the people win about 80% of the awards.
  • 20% of patients use up 80% of medical resources.
  • 20% of criminals commit 80% of crimes.

Need more examples?

In fact, if you read my article on Zipf’s Law, you would know the distribution of words in the language




As the image shows 20% of words account for about 80% of the word usage. So if you see closely, quite logically Zipf’s law is in part responsible for Pareto’ Principle. Math is interlinked. That is what makes it so easy and hard at the same time.


Enjoy your high school with - High School Pedia : www.highschoolpedia.com

Comments

Popular Posts

Cathode Ray Experiment

This experiment was conducted by J.J. Thomson (Sir Joseph John Thomson) in the year 1897. This experiment proved that atom is made up of fundamental particles which are much smaller than the smallest atom 'hydrogen' This experiment helped to discover electron. According to J.J. Thomson, the cathode rays consisted of very light, small and negatively charged particles. He named the particles "corpuscles" which were later known as electrons

Android Versions Named After Sweet

Have you ever thought why are Android versions always named after sweet names ?? Everytime a new Android version is launched its name is kept after a sweet name. Many people have researched about this topic and many have asked Google also. Have you ever tried to find out the core reason behind this? If not then you would find the answer here . First of all let us first see what Google says about this : In 2008 i.e. the year when Android was launched a reporter asked the reason for the same. At that time Google said “It’s kind of like an internal team thing, and we prefer to be a little bit — how should I say — a bit inscrutable in the matter, I’ll say,” said Randall Sarafa, a Google spokesman. “The obvious thing is that, yeah, the Android platform releases, they go by dessert names and by alphabetical order for the most part."

Anode Ray Experiment

→Anode ray experiment was conducted by E Goldstein. →These rays are also known as canal rays. →This experiment helped in the discovery of the proton. Apparatus Used A discharge tube  was taken in which there were 2 electrodes i.e. Anode(+ve) and the cathode (-ve). The tube was filled with an inert gas. A perforated or porous cathode was used. A layer of zinc sulphide was placed at the back of the cathode. There was a vacuum pump in the tube. High voltage (5000v-10000v) was allowed to flow through the system. It was observed that when the gas was at 1atm(atmospheric pressure ) no change was seen in the tube.  When the   pressure   was decreased inside the tube, a glow could be seen at the back side of the cathode.

Rutherford Alpha Ray Scattering Experiment

Rutherford Alpha Ray Scattering Experiment Hey, Guys, most of you might have heard about the alpha ray scattering experiment and if you want to know in detail about Rutherford's model and the experiment he conducted, this is the right place for you... But first: Things You Must Know Some basic information that will help you understand rutherford experiment properly: Proton is a sub-atomic particle which is positively charged and has a mass of 1u. Alpha particles are helium atom with a charge of +2 as they have lost 2 electrons. Alpha particles have an atomic mass  of 4u. Gold is highly malleable and can be beaten into very thin sheets. Experiment Rutherford conducted his experiment in the following way: Rutherford took a very thin gold foil and bombarded it with high energy alpha particles. He placed a layer of zinc sulphide on the walls where the experiment was taking place because when alpha particles strike zinc sulphide layer, it results i

Animal and Plant Cells

 Cells Cells are the basic functional, biological and structural unit of life. The word cell is a Latin word meaning ‘small room’. Cells are also known as building blocks of life.  The branch of science that deals with the form, structure, and composition of a cell is known as Cytology. All organisms around us are made up of cells. Bacteria, ameba, paramecium, algae, fungi, plants and animals are made up of cells.  Cells together form tissues. And tissue together makes an organ. History Of Cell The cell was discovered by Robert Hooke in 1665. He assembled a simple microscope and observed a very thin slice of cork under his primitive microscope. The cork was obtained from the outer covering of a tree called bark. Robert Hooke observed many little-partitioned boxes or compartments in the cork slice. These boxes appeared like a honey-comb. He termed these boxes as the cell. He also noticed that one box was separated from another by a wall. What Ho

Sectors of Indian Economy

Hey there all the tenthees. You guys must be facing a lot of pressure as it is a board class as quoted by many teachers. You need to take care of each and every stuff including the small stats too. But unfortunately most of the Economics books we got do not have the graph 3 for the chapter Sectors of Indian Economy. No worries guys you came to the right place. We are providing you with the graph of December 2015 edition which is the latest graph which we need. All the best for your board exams and here you go Once again All the very best guys !!!

Doppler Effect

Doppler Effect states that there is a change in the frequency of sound because of the relative motion between the observer or the listener and the source of the object. In simpler words when the source and the listener are in a relative motion there is a change in the frequency of sound and this effect of a change in frequency is known as the Doppler's Effect of sound. When the objects move apart the frequency decreases. When the objects move towards each other the frequency increases. The change in the frequency of the sound is given by the formula: