Increased demand response is essential to fully exploit the Swedish power system, which in turn is an absolute prerequisite for meeting political goals related to energy efficiency and climate change. Demand response programs are, nonetheless, still exceptional in the residential sector of the Swedish electricity market, one contributory factor being lack of knowledge about the extent of the potential gains. In light of these circumstances, this empirical study set out with the intention of estimating the scope of households' response to, and assessing customers' perception of, a demand-based time-of-use electricity distribution tariff. The results show that households as a whole have a fairly high opinion of the demand-based tariff and act on its intrinsic price signals by decreasing peak demand in peak periods and shifting electricity use from peak to off-peak periods. (C) 2011 Elsevier Ltd. All rights reserved.