In statistics, a power law is a functional relationship between two quantities, where a relative change in one quantity results in a proportional relative change in the other quantity, independent of the initial size of those quantities: one quantity varies as a power of another.
A power law distribution has the form Y = k Xα, where:
- X and Y are variables of interest,
- α is the law’s exponent,
- k is a constant.
The power law can be used to describe a phenomenon where a small number of items is clustered at the top of a distribution (or at the bottom), taking up 95% of the resources. In other words, it implies a small amount of occurrences is common, while larger occurrences are rare. For example, where the distribution of income is concerned, there are very few billionaires; the bulk of the population holds very modest nest eggs.
- This is neat:
If you plot two quantities against each other with logarithmic axes and they show a linear relationship, this indicates that the two quantities have a power law distribution.