![]() The principle also holds within the tails of the distribution. Distribution of world GDP, 1989 Quintile of population However, among nations, the Gini index shows that wealth distributions vary substantially around this norm. He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied (see concentration of land ownership).Ī chart that gave the effect a very visible and comprehensible form, the so-called "champagne glass" effect, was contained in the 1992 United Nations Development Program Report, which showed that the distribution of global income is very uneven, with the richest 20% of the world's population receiving 82.7% of the world's income. Pareto noticed that approximately 80% of Italy's land was owned by 20% of the population. Pareto's observation was in connection with population and wealth. Later during his career, Juran preferred to describe this as "the vital few and the useful many" to highlight that the contribution of the remaining 80% should not be discarded entirely. Juran applied the observation that 80% of an issue is caused by 20% of the causes to quality issues. Pareto noted that approximately 80% of Italy's land was owned by 20% of the population. Juran, a Romanian-born American engineer, came across the work of Italian polymath Vilfredo Pareto. It is an adage of business management that "80% of sales come from 20% of clients." History Many natural phenomena distribute according to power law statistics. Mathematically, the 80/20 rule is roughly described by a power law distribution (also known as a Pareto distribution) for a particular set of parameters. The Pareto principle is only tangentially related to the Pareto efficiency. 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. 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. ![]() Other names for this principle are the 80/20 rule, the law of the vital few or the principle of factor sparsity. The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes (the "vital few"). 20% of the donors contributing towards 80% of the total. The Pareto principle may apply to fundraising, i.e. ![]() ( Learn how and when to remove this template message) Please help improve this article by citing reliable, secondary sources that evaluate and synthesize these or similar examples within a broader context. This article focuses too much on specific examples without explaining their importance to its main subject.
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