Examples of The Pareto Principle

While it seems evident that the Pareto Principle exists, several studies were conducted in a variety of areas on the local level of the authors of this presentation. The first study involved identifying which coaches in the 12th Region of the Kentucky High School Athletic Association had the most wins and did the distribution of all the wins in that region follow the Pareto Distribution and Price’s Law?  

The chart above shows the results of that study, and it closely follows Price’s Law. Price’s Law predicts that of the 45 coaches that coached in the last 10 years, half of the wins (1245) should be by the top seven coaches. The actual wins by the top seven coaches is 1129. This is a 90% correlation to Price’s Law: Also, Price’s Law predicts that the top three coaches should account for a full 25% of the wins or 623 wins. The actual number of the wins by the top three coaches is 602 with a 96.7% correlation to Price’s Law. It is clear that Price’s Law predicts the success of boy’s basketball coaches in the KHSAA 12th Region.

  Similar findings to the KHSAA Basketball coaches study are found in examining the sales by realtors in our area in the year 2019. The square root (14) and the total number of realtors (199) account for 125 million dollars of the 390 million dollars in total sales. This shows a 63.7% correlation to Price’s Law. Furthermore, four realtors account for 52 million dollars in sales with a 53.3% correlation to Price’s Law. Although the correlation of this study is not as large as the KHSAA study, it is significant, and the graph shows a clear representation of Pareto Principle and Price’s Law.