There are two standard parameters for the Pareto distribution: Location and Shape. The Location parameter is the lower bound for the variable.
After you select the Location parameter, you can estimate the Shape parameter. The Shape parameter is a number greater than 0, usually greater than 1. The larger the Shape parameter, the smaller the variance and the thicker the right tail of the distribution.
The Shape parameter symbol is (beta).
The Location parameter symbol is L.
To calculate a more exact shape, you can estimate the mean and use the equation (for shapes greater than 1):
Or estimate the variance and use the following equation (for shapes greater than 2):
