Pareto principle - Wikipedia, the free encyclopedia: "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 phenomena, 80% of the consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places, but it is commonly misused. E.g., it is a misuse to state that a solution to a problem 'fits the 80-20 rule' just because it fits 80% of the cases; it must be implied that this solution requires only 20% of the resources needed to solve all cases. Mathematically, where something is shared among a sufficiently large set of participants, there will always be a number k between 50 and 100 such that k% is taken by (100-k)% of the participants. However, k may vary from 50 in the case of equal distribution to nearly 100 in the case of a tiny number of participants taking almost all of the resources. There is nothing special about the number 80, but many systems will have k somewhere around this region of intermediate imbalance in distribution.
The principle was suggested by management thinker Joseph M. Juran. It was named after the Italian economist Vilfredo Pareto, who observed that 80% of income in Italy was received by 20% of the Italian population. (Since J. M. Juran adopted the idea, it might better be called 'Juran's assumption'.) The assumption is that most of the results in any situation are determined by a small number of causes. This idea is often applied to data such as sales figures: '20% of clients are responsible for 80% of sales volume.' Such a statement is testable, is likely to be approximately correct, and may be helpful in decision making. Richard Koch has written extensively on how to apply the principle in all walks of life."
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