AbstractThe shortwave direct radiative effect of dust, the difference between net shortwave radiative flux in a cloud free and cloud and aerosol free atmosphere, is typically estimated using forward calculations made with a radiative transfer model. However, estimates of the direct radiative effect made via this initial method can be highly uncertain due to difficultly in accurately describing the relevant optical and physical properties of dust used in these calculations. An alternative approach to estimate this effect is to determine the forcing efficiency, or the direct radiative effect normalized by aerosol optical depth. While this approach avoids the uncertainties associated with the initial method for calculating the direct effect, random errors and biases associated with this approach have not been thoroughly examined in literature. Here we explore biases in this observation‐based approach that are related to atmospheric water vapor. We use observations to show that over the Sahara Desert dust optical depth and column‐integrated atmospheric water vapor are positively correlated. We use three idealized radiative models of varying complexity to demonstrate that a positive correlation between dust and water vapor produces a positive bias in the dust forcing efficiency estimated via the observation‐based method. We describe a simple modification to the observation‐based method that correctly accounts for the correlation between dust and water vapor when estimating the forcing efficiency and use this method to estimate the instantaneous forcing efficiency of dust over the Sahara Desert using satellite data, obtaining −12.3 ± 6.68 to 20.9 ± 11.9 W m−2 per unit optical depth.