The Pareto Principle
Also known as: 80/20 Rule, Law of the Vital Few
Formulated by Vilfredo Pareto (1906)
Definition
The Pareto Principle, also known as the 80/20 rule, states that for many outcomes, roughly 80% of consequences come from 20% of the causes. This concept originated from Italian economist Vilfredo Pareto's 1906 observation that about 80% of the land in Italy was owned by 20% of the population. In practice, it means a small proportion of inputs or efforts are often responsible for the majority of results. The principle serves as a heuristic to identify and prioritize the 'vital few' from the 'trivial many,' helping improve efficiency and decision-making across business, economics, and personal productivity.