There are four types of Pareto distribution. Originally developed for exploring the distribution of wealth, they lead to Pareto analysis and to the Pareto principle, or ‘80/20 rule’, familiar to many engineers.
The Pareto‐I distribution is described by the PDF
The shape parameter δ is sometimes described as the tail index; β is the minimum nonzero value that x can have. Figure 23.1 shows the effect of changing these parameters.
The CDF is
The QF is
The moments are given by
From this can be derived
One application is to assess the ...