subscript m stands for minimum). The Pareto index is the parameter α. Since a proportion must be between 0 and 1, inclusive, the index α must be positive, but in order for the total income of the whole population to be finite, ? must also be greater than 1. The larger the Pareto index, the smaller the proportion of very high-income people.

Given a rule , with , the Pareto index is given by:
:If , this simplifies to
:Alternatively, in terms of odds, X:Y
:so X:1 yields
:

For

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