Tags All Entries

Pareto Principle

The Praeto principle argues that 80% of the outcomes comes from 20% of the causes. For example, 80% of fund raising for a non-profit may come from 20% of donors. This is often a useful model, but Shawn Wang argues that there are flaws to this thinking1. It may be applying dimensional reduction where there is none, e.g. there is not 80/20 in parachute packing. Much of the remaining 80% can be important details that cannot be missed.


Links to this note