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.