Pareto principle

The heuristic that, in some systems, a small share of causes accounts for a large share of effects, often approximated as 20% and 80%.

Power law: A mathematical relationship in which a quantity varies as a power of another quantity. Heavy-tailed power-law distributions can produce a small number of outsized contributions.
Vilfredo Pareto: An Italian engineer, sociologist, and economist who studied wealth distribution and social inequality. His observations of unequal land and income distributions inspired the principle's name.
Pareto chart: A bar chart that ranks categories by frequency or impact, often paired with a cumulative-percentage line. It identifies which defect categories account for the largest share of a measured problem.
Zipf's law: An empirical regularity in which the frequency of an item is inversely proportional to its rank. It also describes highly unequal distributions, but specifies a rank-frequency pattern rather than an 80/20 share.
Pareto distribution: A probability distribution with a power-law tail, used to model quantities with many small values and few large ones. This distribution gives a precise mathematical form to one common source of Pareto-like concentration.
Pareto's law of income distribution: A model proposed by Vilfredo Pareto describing the distribution of income with a power-law form. This early quantitative claim is the principle's historical economic foundation.
ABC analysis: An inventory-control method that groups items by their value or importance to an organization. It applies unequal-contribution thinking to stock, commonly separating high-value items from the rest.
Normal distribution: A symmetric probability distribution characterized by its mean and standard deviation. Its thin tails generally produce less extreme concentration than Pareto-like distributions.
Lorenz curve: A graph showing the cumulative share of a quantity held by the cumulative share of a population. It makes concentration visible without assuming an exact 80/20 split.
Joseph M. Juran: An American quality-management expert who developed influential methods for improving industrial processes. Juran popularized the principle in quality management as the distinction between vital few and trivial many.

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