Anonymous asked in Social ScienceEconomics · 10 months ago

Why can the 80 20 rule (or Pareto principle) be applied almost everywhere?

It started from 1895, when the Italian economist Vilfredo Pareto noticed that people in society seemed to divide naturally into the top 20 percent in terms of money and influence, and the bottom 80 percent.

Then the concept became essential in business and economics, but I don't understant why. Why these two numbers are so crucial?

Why not 15 and 85 or 25 and 75? Makes me think of some golden ratio.

2 Answers

  • Oiy
    Lv 6
    10 months ago
    Favorite Answer

    I use 30/20 as an economist and trader.

  • Zirp
    Lv 7
    10 months ago

    It can't, but "It is natural" is a great excuse to justify (increasing) inequality

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