Vaccine efficacy in the field is often derived from the relative attack rates in the vaccinated and unvaccinated after an outbreak. In this paper, vaccine efficacy is defined in terms of the probability that the infectious agent is transmitted from an infected to a susceptible person, and a method for estimating it from the usual attack rate data is given. We explore two mechanisms of vaccine action defined by Smith et al, but include an underlying dynamic epidemic model of an acute directly transmitted disease. We show analytically that under the model in which the vaccine mechanism reduces the probability of infection given a certain exposure, vaccine efficacy based on the relative attack rates underestimates the protective effect of the vaccine based on the relative transmission probabilities. Under the other model in which the vaccine mechanism offers complete protection to a certain proportion of those vaccinated, and no protection to the other vaccinated proportion, the vaccine efficacy based on the relative attack rates will equal that based on the transmission probabilities. Parameters for the effectiveness of a vaccination programme are defined in terms of the direct and indirect benefit to a single person as well as the total and average benefit to the entire population, and derived from the dynamic model for an outbreak of an acute directly transmitted disease. These effects can also be estimated without an actual separate unvaccinated population, independent of assumptions about the vaccine mechanism. The variation of these measures as functions of the fraction of vaccinated people in the population is explored numerically.