Pareto Distribution
Definition 
Normally, the parameter K is known and represents the lower border of the data. The parameter λ has to be adjusted to the data to obtain a best fit.
The Pareto distribution has been described for the first time by V. Pareto, an Italian economist, who discovered that a small portion of the population owns a large portion of the gross national capital (8020rule: 20% of the population own 80% of the capital). 
Graphic Representation 
The diagram at the left shows the Pareto distribution with the parameters K=1 and λ=2, 3, 5 and 10 
Applications 
A few examples of data following a Pareto distribution:
 the size of meteorites (many small, few large ones)
 the size of settlements (few mega cities, many small villages)
 the wealth of persons
 the size of sand grains

Mean 
μ = Kλ/(λ1); λ > 1 
Variance 
σ = K^{2}λ/(λ1)^{2}/(λ2); λ > 2 
