Running on a treadmill is very similar to running outdoors, but it's not exactly the same. The subtle differences between treadmill and outdoor running have led some runners and coaches to wonder if there are ways to manipulate treadmill workouts to make them more like running outdoors. Such inquiries have resulted in the common practice of setting the treadmill belt at an incline of one percent.
The idea behind this practice is that the energy cost of running at a given pace on the treadmill is slightly lower than it is outdoors because you don't have to push against air resistance. For the same reason, you also dissipate body heat more readily outdoors than you do on the treadmill. When you raise the angle of the treadmill belt to one percent, this discrepancy disappears and running on the treadmill is no longer "easier" than running outdoors.
The one percent rule comes from a study conducted by researchers at the University of Brighton, England, in 1996. What the researchers actually found was that the energy cost of running on the treadmill was about the same as the energy cost of running outdoors at paces of 8:03 per mile and slower. The energy cost of running on the treadmill was lower than running outside only at paces of 7:09 per mile and faster and was equal when the treadmill was at a one percent incline. This is because air resistance increases at faster paces when one is running outdoors.
So the results of this study seem to suggest that, in order to make indoor running as similar as possible to outdoor running, you should set the treadmill belt at an incline of zero percent for slower workouts and at one percent for faster workouts. There's a problem with this interpretation, though. It's based on the assumption that matching the energy cost of indoor and outdoor runs makes them fundamentally equal, and there's reason to believe this isn't true.