Electrically switchable Bragg reflection gratings, comprised of periodic monolayers of liquid crystal nanodroplets embedded in a polymer, have historically displayed limited diffraction efficiency (< 90%). Attempts to increase diffraction efficiency by increasing the liquid crystal concentration lead to undesirable levels of incoherent scattering. We have developed a model of liquid crystal Bragg gratings to study and predict these properties for reflection filters. Examining the effective medium theory of inhomogeneous nanodroplet layers, we have investigated the enhancement of properties that lead to higher diffraction efficiency without increasing incoherent scattering. In particular, we focus on properties of nanodroplet ensembles that contribute to the permittivity modulation of the grating, leading to coherent diffraction, and permittivity variance, leading to incoherent scattering. Using the liquid crystal BL037 in a commercially available polymer as an example, we illustrate how a diffraction efficiency of 99% can be achieved, without simultaneously increasing the level of incoherent scattering, and compare this to the previous state of the art with these materials. We then demonstrate this approach experimentally, confirming the viability of the technique and the predictions of the model.© (2008) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.