就政府政策目的而言，漲跌幅制度可以降低市場的振幅性。然而從財務理論的觀點言，這項關係並不明確。其中涉及兩項相關的假設；一是依據情報假設的論點(information hypothesis)，證人的振幅性完全受新資訊流入的影響；如果也受到漲跌幅制度的影響，那全是因為統計上的截斷效果(truncation effect)。此外依據過度反應的假設(overreaction hypothesis)，漲跌幅的設置可以有效地透過壓抑市場投機以冷卻過熱的市場來降低市場的振幅。然而這項假設的對立主張是認為由於漲跌幅的存在，同時也會因為當股價遇上漲跌停板時，增加了流動性成本而產生額外的賣壓和買壓，反而更增加市場的振幅性。因此這兩項滿四係似乎並不明確。在財務文獻上有關漲跌幅的研究在理論上已有所探討，然而有關的實證研究確很少。有鍵於此，本研究以臺灣證卷市場為例，主要採用加權的最小平方法(weighted least square)來研究漲跌幅與市場振幅性的關係。依據研究的結果顯示，發現漲跌幅的與平均每日的振幅(daily volatility)有正相關。但若加長衡量振幅的期間如二天，三天或一星期時，則這項關係並不太顯著。推論其原因是它們之間的正關係之所以存在是由於統計上的截斷效果所造成。本研究也另外探討它們的因果關係，發現漲跌幅是因而市場的振幅是果。換言之即當漲跌幅擴大時即市場的振幅也隨而增加；反之亦然。同樣地這個結論也與截斷效果一致。

The stated regulatory objective for imposing price limits is to reduce return volatility. However from the financial theory, the relationship is ambiguous. Two hypothesis are relevant. First, the information hypothesis argues that volatility is related to new information, and price limits will influence volatility only through the truncation effect. Second, the overreaction hypothesis suggests that price limits can cool down an “overheated” market, and effectively dampen volatility by depressing speculative overreaction. An alternative specification of the overreaction hypothesis is that price limits may increase liquidity costs when the limit is hit and create additional buying and selling pressure. This may lead to increase the volatility. While theoretical proposition regarding the effect of price limits have been discussed in the literature, few published empirical studies from the financial theory perspective have been investigated. This study employed Taiwan stock return data obtained from the Pacific-Basin Capital Markets Research Center at Rhode Island University. The weighted least square approach is used for analyzing the relationship between the price limits and return volatility. The results show a positive relationship between price limits and daily volatility. However, as the return interval increases, this relationship becomes inconsistent. These results support the hypothesis that only the truncation effect is present. The cause and effect between limit changes and volatility changes is also examined. The results are ambiguous but seem to suggest that price limit increase (decreases) cause (permit) volatility increases (decreases). This is also consistent with the truncation effect.