80 20 rule with dating

The idea has a rule of thumb application in many places, but it is commonly misused.For example, it is a misuse to state a solution to a problem "fits the 80/20 rule" just because it fits 80% of the cases; it must also be that the solution requires only 20% of the resources that would be needed to solve all cases.

This is a special case of the wider phenomenon of Pareto distributions.A chart that gave the inequality 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 distribution of global income is very uneven, with the richest 20% of the world's population controlling 82.7% of the world's income.The more predictions a theory makes, the greater the chance is of some of them being cheaply testable.It is an axiom of business management that "80% of sales come from 20% of clients." Mathematically, the 80/20 rule is roughly followed by a power law distribution (also known as a Pareto distribution) for a particular set of parameters, and many natural phenomena have been shown empirically to exhibit such a distribution.He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied.If the Pareto index α, which is one of the parameters characterizing a Pareto distribution, is chosen as α = log5 ≈ 1.16, then one has 80% of effects coming from 20% of causes.It follows that one also has 80% of that top 80% of effects coming from 20% of that top 20% of causes, and so on.Thus, specifying two percentages independently does not lead to a broader class of distributions than what one gets by specifying the larger one and letting the smaller one be its complement relative to 100%.Thus, there is only one degree of freedom in the choice of that parameter. For example, if 80% of effects come from the top 20% of sources, then the remaining 20% of effects come from the lower 80% of sources.Eighty percent of 80% is 64%; 20% of 20% is 4%, so this implies a "64/4" law; and similarly implies a "51.2/0.8" law.Similarly for the bottom 80% of causes and bottom 20% of effects, the bottom 80% of the bottom 80% only cause 20% of the remaining 20%.

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