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What is the Pareto Principle?

What’s that? The Pareto Principle is also known as the 80/20 Rule. We’ve all heard of this rule and it is in practice in most aspects of our lives. Simply stated, the principle submits that 80% of effects come from 20% of causes. Additionally, the Pareto Principle is referred to as the “law of the vital few” and the “principle of factor sparsity”.

Italian economist, Vilfredo Pareto, first wrote about this phenomenon in 1906. Pareto developed a mathematical formula to document his findings that 20% of the population owned 80% of the land. Pareto was also able to establish that 80% of the peas in his garden came from 20% of the plants. Continue reading ‘What is the Pareto Principle?’ »

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