Paritian

Statistics

Pareto Principle Calculator (80/20 Rule, Pareto Index and Gini)

Fit a Pareto distribution to a rule like 'the top 20 % hold 80 %' and read off the Pareto index, the Gini coefficient and the shares held by the top 1 %, top 10 % and bottom half.

Results

Pareto index α 1.1610
Gini coefficient of that distribution 0.756
Share held by the top 1 % 52.8 %
Share held by the top 10 % 72.7 %
Share held by the bottom 50 % 9.2 %
How it changes
Gini coefficient of that distribution…together hold this share of the total 21 – 99. Gini coefficient of that distribution: 0.0153908 → 0.987588Gini coefficient of that distribution00.20.40.60.81406080…together hold this share of the total (%)

The dashed line marks the value you entered.

What this tool does

The 80/20 rule is the best-known case of a Pareto distribution, where a small top group holds most of the total — sales, wealth, bugs, complaints. If the top fraction x holds a share y, the exponent follows from ln y ÷ ln x, and the same curve then tells you what any other top slice holds: 80/20 is a Pareto index of about 1.16 and a Gini coefficient of about 0.76, and the top 1 % would hold roughly 53 %. The rule is a rough heuristic, not a law of nature: real shares vary, and extreme tails rarely follow one curve exactly.

Formula

top fraction t holds t^(1 − 1/α) · α = 1 ÷ (1 − ln y ÷ ln x) · Gini = 1 ÷ (2α − 1)

Variables

SymbolMeaningUnit
xtThe top group — share of people, customers or items%
yt…together hold this share of the total%
ALPareto index α—
GIGini coefficient of that distribution—
T1Share held by the top 1 %%
T10Share held by the top 10 %%
B50Share held by the bottom 50 %%

Worked example

  • The top group — share of people, customers or items20 %
  • …together hold this share of the total80 %
  • Pareto index α1.1610
  • Gini coefficient of that distribution0.756
  • Share held by the top 1 %52.8 %
  • Share held by the top 10 %72.7 %
  • Share held by the bottom 50 %9.2 %

Limitations

  • The result is an estimate based only on the values you type. Real situations often include factors this calculator does not know about.
  • The default values are typical reference figures, not measurements of your situation. Replace them with your own data whenever you have it.