HABITS: how 80% of our life is dictated by 20% of what we do

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Pareto’s Principle and Power Laws

Pareto’s principle tells us that 80% of the effects come from 20% of the causes. In other words, 80% of the land is owned by 20% of the people. This is something Vilfredo Paretos discovered while studying Italy’s land ownership as an economist at the University of Lausanne. His 80/20 rule is an example of a “power law”.

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Power laws are specific relationships between two things where one quantity varies as the power of another. For example, 2 to some power is shown below.

As the power increases by increments of one the output doubles.

One practical example of a power law can be found in the “Brown Corpus”. It’s a document compiled by Brown University which contains 500 English texts with over one million unique words. If we were to count the number of times each word appeared (frequency) then ordered them from most to least we would find the plot below. What do ya know? It’s a power law. We would say that the frequency is inversely proportional to the rank, frequency…