Abstract To realize the benefits of smart grids, residential demand response (DR) aims to increase demand flexibility by influence household electricity consumption. Although price-based DR programs have shown potential, there is a need to further investigate the effectiveness of DR in energy strategy and policy development. The evaluation of DR has focused on the impact on overall power demand, assuming that consumers are economically rational decision-maker. However, recent findings suggest that consumer responses have been insufficient and calls have been made to identify novel evaluation approaches that better reflect the human dimension of energy consumption. Continuing this line of enquiry, this paper aims to investigate the effectiveness of DR and explore the potential of environmental incentives for increased consumer engagement. We propose an interdisciplinary evaluation framework to understand variations in household responsiveness to DR strategies, which is tested in a Swedish DR field trial covering 136 households during 2017. Results suggest that the effectiveness of DR varies widely across household type; ranging from substantial reductions in overall consumption and during peak periods, to increases in consumption during peak periods. Furthermore, a clear favor of price incentives, compared to environmental incentives, as the most efficient strategy to increase demand flexibility was observed.