You ever notice how you spend most of your time with only a few of your friends? Or how, at work, it always seems like most of your colleagues don’t really do much, and the whole company would probably flounder if not for you and like, three other people?

How about your gadgets? They crash, right? But they crash predictably – in fact, when you search online for the solution, it’s almost like four out of every five results are to fix the same handful of issues. Or: look in your closet. You probably own at least 20 shirts, but how often do you opt for any of them outside a select, say, four?

In fact, all of these are examples of the so-called “Pareto Principle”, or 80/20 rule. It’s been touted as everything from a life hack to an unshakeable law of humanity – though in fact, even its names are arguably overselling it. So, what’s going on?

The Pareto Principle

The Pareto Principle is an economic concept named after Vilfredo Federico Damaso Pareto. As his name suggests, he was Italian; born in 1848, he dipped his toe in just about every field of study possible throughout his life.

“Pareto was one of the last Renaissance scholars,” wrote sociologists Joseph Lopreato and Sandra Rusher in 1983. “Trained in physics and mathematics, he became a polymath whose genius radiated into nearly all other major fields of knowledge.”

He’s probably most famous today, however, as an economist – and that’s in no small part thanks to his eponymous Principle. But despite bearing his name, what we now call the “Pareto Principle” doesn’t come directly from the man himself – rather, Pareto made a kind of vague observation, and a few decades later, somebody else came along, made a wild generalization off of what he had noticed, and named the new version after him.

So, what was it that Pareto said? In fact, it was an observation about wealth: basically, he said, most of the land is owned by a minority of people. In fact, he noticed, the two variables – the amount of wealth, income, or labor, and the proportion of the population that possessed it – were related via a power law, the generalized version of which is now known as a Pareto distribution.

Now, many places will say he went much more specific, saying that 80 percent of the land in Italy at the time was owned by 20 percent of the people – this is the version that became famous as the “80/20 law”, after engineer Joseph Juran popularized it in the mid-20th century. For Juran, however, it was more than an observation – it was a “universal” truth, applicable to just about every aspect of economics, business, and sociology. 

Since then, it’s gone from strength to strength: it’s shared regularly by business influencers; engineers; teachers; programmers; psychologists; you can even find dentists lauding its praises in international journals.

So, here’s the question: does it actually, you know… work?

Pareto in practice

Pareto’s Principle, particularly as expressed as “80/20 rule”, is pretty seductive. But outside of Pareto’s original observation, does it actually hold up?

The answer seems to be… yeah, maybe – but nowhere near as much as its proponents want you to believe. Sure, a lot of phenomena follow the double-logarithmic pattern that gave Pareto’s original pattern, but precious few of them follow the 80/20 rule – and even Pareto himself knew it.

“At the everyday level, there is a strong opinion that the Pareto principle is applicable to all facts of human life,” wrote Gennady A. Grachev, a physicist at Russia’s Southern Federal University, in 2024. “As a result, no one doubts that 20 percent of customers generate approximately 80 percent of revenue; 80 percent of complaints come from 20 percent of customers; 20 percent of output accounts for 80 percent of revenue; 20 percent of businesses produce 80 percent of output; 20 percent of all opportunities for error account for 80 percent of errors; 20 percent of all workers account for 80 percent of all absenteeism; in any given meeting, 80 percent of all decisions are made in 20 percent of the time; 20 percent of research authors write 80 percent of all published works; 20 percent of people in our lives give us 80 percent of the reasons for stress; 80 percent of crimes are committed by 20 percent of criminals; 20 percent of men drink 80 percent of beer, etc.”

“However, Pareto did not announce his discovery of the universal 20:80 rule,” Grachev pointed out. “This is not surprising, since he knew that the actual data on British income taxes in his Cours d’économie politique show that 27.7 percent of the population had approximately 72.3 percent of income.”

Of the few studies out there that actually tried to verify the “rule”, many – though of course not all – have found it inaccurate. Recruiters hire according to an 80/50 rule, if anything; in marketing and sales, it’s more like 70/20. It doesn’t work for programming, it’s wildly off-base for Wikipedia, and when we try to apply it as it was originally intended – as a measure of wealth concentration – it’s definitely no longer fit for purpose. 

It makes you wonder, really – why does anybody care about this rule at all?

Using the Pareto Principle (even though it doesn’t really work)

There is a way to make the Pareto Principle pay off, and it’s pretty simple: just don’t be so anal about it.

“The value of the principle does not lie in the exact ratio,” wrote Helene Westerby and Tamara Knarbakk Nortun in a 2021 thesis on the Principle’s use in marketing. That’s why some researchers prefer less exact terms: “labels […] such as ‘heavy half’ or ‘heavy users’ and ‘light half’ or ‘light users’, respectively,” Westerby and Knarbakk Nortun explained, where “the heavy half buys more, buys more often, and buys more varied brands than lighter users.”

In the age of big data, companies who have investigated the Pareto Principle have often discovered their market to be “super-Paretos” – ratios as lopsided as 10/90, 2/30, or even 10/150. And there’s a reason they’re interested in these statistics: as vague as the rule turns out to be in real life, many economists believe it still has wisdom to offer.

“The Pareto Principle can act as a tool for growth through enabling marketers to identify a small core of consumers which can help brands increase their profits,” wrote Westerby and Knarbakk Nortun. Other researchers, they point out, have argued that “the use of the principle, despite its possible inaccuracies, is better than having no rules to guide behavior and decision-making.”

Put simply, there’s a reason the Principle languished in the decades between Pareto first noticing it and Juran popularizing it: it just doesn’t work that well. But if you keep your interpretation of it loose, it becomes a lot more useful.

“For all the excesses of the Paretian camp followers, there remains the significant insight that the history of all hitherto existing society is a history of social hierarchies,” wrote economist Joseph Persky in 1992. “Almost all income distributions are continuous, unimodal and highly skewed.” 

“We have no examples of uniform distributions or egalitarian distributions or strikingly trimodal distributions,” he wrote. “Something is going on here.”