Efficiency vs Efficacy

• Efficiency

  Efficiency is lack of waste. In some cases, it can mean "lack of waste of money" or "lack of waste of energy".

  Example: You're selling widgets, and you want to make the most money possible. This is an efficiency goal. Widget production cost = waste + materials + labor.

• Efficacy

  Efficacy is effectiveness. It can mean "level of coverage" or "level of positive outcome".

  Example: You're making a vaccine, and you want to make sure everyone gets it. Price is no longer particularly important, only the level of coverage. This is an efficacy goal. Number of people dead = ((people in population) / (people covered))^2 (since transmission is reduced, it's square-law-type)

For example, you want these to be efficient:

• Tax collection
• Luxury good distribution
• Financial services

You want these to be efficacious:

• Medical care
• Car safety
• Welfare services
• Fire and police services
• Education