Editing Pareto principle (section)

=== Economics ===
Pareto's observation was in connection with [[Concentration of land ownership|population and wealth]]. Pareto noticed that approximately 80% of Italy's land was owned by 20% of the population.<ref name="auto"/> He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied.{{citation needed|date=August 2022}}

A chart that demonstrated the effect appeared in the 1992 [[United Nations Development Programme|United Nations Development Program]] Report, which showed that the richest 20% of the world's population receives 82.7% of the world's income.<ref>{{citation|author=United Nations Development Program|title=1992 Human Development Report|year=1992|location=New York|publisher=Oxford University Press}}</ref> However, among nations, the [[Gini index]] shows that wealth distributions vary substantially around this norm.<ref>{{cite web|title=Poverty, Growth, and Inequality over the Next 50 Years|first=Evan|last=Hillebrand|publisher=FAO, United Nations – Economic and Social Development Department|date=June 2009|archive-url=https://web.archive.org/web/20171020065423/ftp://ftp.fao.org/docrep/fao/012/ak968e/ak968e00.pdf|archive-date=2017-10-20|url-status=dead|url=ftp://ftp.fao.org/docrep/fao/012/ak968e/ak968e00.pdf}}</ref>

{| class="wikitable"
|+ Distribution of world GDP, 1989<ref name="1992 Human Development Report, Chapter 3">{{citation|url=http://hdr.undp.org/en/reports/global/hdr1992/chapters/|title=Human Development Report 1992, Chapter 3|access-date=2007-07-08}}</ref>
|-
! scope="col" | Quintile of population
! scope="col" | Income
|-
| Richest 20%
| 82.70%
|-
| Second 20%
| 11.75%
|-
| Third 20%
| 2.30%
|-
| Fourth 20%
| 1.85%
|-
| Poorest 20%
| 1.40%
|}

The principle also holds within the tails of the distribution. The physicist Victor Yakovenko of the [[University of Maryland, College Park]] and AC Silva analyzed income data from the US Internal Revenue Service from 1983 to 2001 and found that the [[income distribution]] of the richest 1–3% of the population also follows Pareto's principle.<ref>{{Citation|last1=Yakovenko|first1=Victor M.|title=Two-class Structure of Income Distribution in the USA: Exponential Bulk and Power-law Tail|date=2005|work=Econophysics of Wealth Distributions: Econophys-Kolkata I|pages=15–23|editor-last=Chatterjee|editor-first=Arnab|series=New Economic Windows|publisher=Springer Milan|language=en|doi=10.1007/88-470-0389-x_2|isbn=978-88-470-0389-7|last2=Silva|first2=A. Christian|editor2-last=Yarlagadda|editor2-first=Sudhakar|editor3-last=Chakrabarti|editor3-first=Bikas K.}}</ref>

In ''Talent: How to Identify Entrepreneurs'', economist [[Tyler Cowen]] and entrepreneur [[Daniel Gross (entrepreneur)|Daniel Gross]] suggest that the Pareto Principle can be applied to the role of the 20% most talented individuals in generating the majority of [[economic growth]].<ref>[[Paris Aéroport]], ''Paris Vous Aime Magazine'', No 13, avril-may-juin 2023, p. 71</ref> According to the ''New York Times'' in 1988, many [[video rental shop]]s reported that 80% of revenue came from 20% of videotapes (although rarely rented classics such as ''[[Gone with the Wind (film)|Gone with the Wind]]'' must be stocked to appear to have a good selection).<ref name="kleinfield19880501">{{Cite news |url=https://www.nytimes.com/1988/05/01/business/a-tight-squeeze-at-video-stores.html?pagewanted=2|url-status=live|title=A Tight Squeeze at Video Stores |last=Kleinfield |first=N. R. |date=1988-05-01 |work=The New York Times |archive-url=http://web.archive.org/web/20150525080808/http://www.nytimes.com/1988/05/01/business/a-tight-squeeze-at-video-stores.html?pagewanted=2|archive-date=2015-05-25|url-access=subscription|issn=0362-4331}}</ref>