**Data Science day 24 : Price Law Vs. Pareto Principle **

Almost everyone knows about the **Pareto Principle** (20/80 Rule), but few people know about **Price Law**. From Dr.Ford’s Class last week, we learned the Price Law and I am fascinated about it.

Today we will go over the basic principle’s of these two laws and use a small python program to compare the results. Then we can choose for ourselves which rule makes more sense.

**Price Law:**

The

square root of the number of peoplein a domaindo 50%of the work.

-Derek John de Solla Price

**Price’s Law** specifically* applies to creative work*. Meaning the creation of something “new” like new products, ideas, software, music compositions, basketball shots made, artwork, etc.

**Example:**

if a company has 10 people then roughly 3 people do 50% of the work.

if we scale the company up to **100 people then 10 people do 50% of the work**.

**Pareto Principle:**

The

Pareto principle(also known as the80/20 rule):

for many events, roughly 80% of the effects come from 20% of the causes.

**Economics:**

Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population.

**Business:**

It is an axiom of business management that “80% of sales come from 20% of clients”

**Sports:**

In athletic training, where roughly 20% of the exercises and habits have 80% of the impact.

**Python code for Price Law & Pareto Law**

def pareto_price(n): a=n*0.2 b=n**(0.5) print ( "Pareto Principle:", a , "% of people in company A do 80 % of the work " ) print ( "Price Law:", b , "% of people in company A do 50 % of the work " ) * company A with 100 employees; pareto_price(100)

**Output:**

Pareto Principle: 20.0 % of people in company A do 80 % of the work

Price Law: 10.0 % of people in company A do 50 % of the work

**Summary:
**

Personally, I think Price Law might be more accurate for some specific areas, Pareto Principle is a more general approach.

But What is the common punchline of Price Law and Pareto rule?

**Be great at what we do** ! At least try very hard to get into that Square Root Group!

**Post class scene:**

*Dr.Ford: Price Law is not famous because almost people freak out when they see the square root*

*Philip: Does it mean of square root amount of students do 50% of the class work?*

**Happy Studying! 😃**

**Reference:**

https://en.wikipedia.org/wiki/Pareto_principle

https://en.wikipedia.org/wiki/Derek_J._de_Solla_Price