Lorenz Curve and the Measurement of Low, Middle and High Strata of Incomes

The authors suggest a new method to determinate the limits of the three basic income groups. The Lorenz curve is split of three parts. The middle part corresponds to the middle stratum of incomes. The projections of this part on both axes are equal segments. The empirical Lorenz curve is transformed in new one with the same Gini coefficient. The transformed curve is composed by three segments with “clearly expressed the three strata of incomes”. The proposed model is used with some statistical data for the incomes and the wealth of the households in Bulgaria and Germany. The calculations are made with iterative methods in Microsoft Excel.