Pareto principle

Statistical principle about ratio of effects to causes

The Pareto principle (also known as the 80:20 rule, the law of the vital few and the principle of factor sparsity) states that, for many outcomes, roughly 80% of consequences come from 20% of causes (the "vital few"). In 1941, management consultant Joseph M. 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 in 1906 about the 80:20 connection while teaching at the University of Lausanne. 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.

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