The Pareto Principle states that 80% of consequences come from 20% of the causes. · The principle, which ...LinkedInwithBackgroundYourPrivacyRightsInvestopediaandourthird-partypartnersusecookiesandprocesspersonaldatalikeuniqueidentifiersbasedonyourconsenttostoreand/oraccessinformationonadevice,displaypersonalizedadsandforcontentmeasurement,audienceinsight,andproductdevelopment.TochangeorwithdrawyourconsentchoicesforInvestopedia.com,includingyourrighttoobjectwherelegitimateinterestisused,clickbelow.Atanytime,youcanupdateyoursettingsthroughthe"EUPrivacy"linkatthebottomofanypage.Thesechoiceswillbesignaledgloballytoourpartnersandwillnotaffectbrowsingdata.ListofPartners(vendors)Weandourpartnersprocessdatato:Activelyscandevicecharacteristicsforidentification.Useprecisegeolocationdata.Storeand/oraccessinformationonadevice.Selectpersonalisedcontent.Createapersonalisedcontentprofile.Measureadperformance.Selectbasicads.Createapersonalisedadsprofile.Selectpersonalisedads.Applymarketresearchtogenerateaudienceinsights.Measurecontentperformance.Developandimproveproducts.ListofPartners(vendors)IAcceptShowPurposesEconomicsRaceandIncomeInequalityGenderandIncomeInequalityPracticalLookAtMicroeconomicsUnderstandingIncomeInequalityGlobalTradeGuideGuidetoEconomicsMicroeconomicsMacroeconomicsBehavioralEconomicsSeeAllEconomyEconomicsWhatIstheParetoPrinciple?TheParetoPrinciple,namedafteresteemedeconomistVilfredoPareto,specifiesthat80%ofconsequencescomefrom20%ofthecauses,assertinganunequalrelationshipbetweeninputsandoutputs.Thisprincipleservesasageneralreminderthattherelationshipbetweeninputsandoutputsisnotbalanced.TheParetoPrincipleisalsoknownastheParetoRuleorthe80/20Rule.KeyTakeawaysTheParetoPrinciplestatesthat80%ofconsequencescomefrom20%ofthecauses.Theprinciple,whichwasderivedfromtheimbalanceoflandownershipinItaly,iscommonlyusedtoillustratethenotionthatnotthingsareequal,andtheminorityownsthemajority.Unlikeotherprinciples,theParetoPrincipleismerelyanobservation,notlaw.Althoughbroadlyapplie