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The exact mathematical form of the Pareto principle
1Oklahoma State University, Stillwater, USA. subhash.kak@okstate.edu.
Abstract:
The exact mathematical form of the empirical Pareto Principle is derived using the optimum power law which is based on information theory. It is shown that the 80-20 Rule is approximately 70-20 for populations below 400, which means that 20% of the individuals have 70% of the resources. Around the population of 100,000 it is nearly 80% but as the population goes into billions, the top 20% get to have nearly 84% of the resources increasing the disparity. This implies that more dense populations have greater inequality than less dense ones which is an unexpected result.
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