The significance of occupancy steadiness in residential consumer response to Time-of-Use pricing: Evidence from a stochastic adjustment model

• Weather and active occupancy can partly explain consumption in relation to price.
• A stochastic adjustment model can reduce the regression error.
• Under TOU tariffs consumption can be partly explained by weather and occupancy.

The recent roll-out of smart metering technologies in several developed countries has intensified research on the impacts of Time-of-Use (TOU) pricing on consumption. This paper analyses a TOU dataset from the Province of Trento in Northern Italy using a stochastic adjustment model. Findings highlight the non-steadiness of the relationship between consumption and TOU price. Weather and active occupancy can partly explain future consumption in relation to price.