I really feel like everyone who voted "very effective" should spend some time during jiyu-keiko demonstrating as much to themselves. Hand a training partner a tanto, and tell them to earnestly try to "kill" you as though it were a real knife. No need for classical aikido strikes; just swing or thrust the knife however feels most natural.
I feel like that might get some people to change their votes. I dunno. Just my two cents!
I disagree. Not everything done when reality hits can be copied in practice. Without the right psychological training (or being a natural sociopath) your partner will probably not have the mindset to really ambush and "kill" you. Because you are training you will hold back from doing everything necessary to survive the encounter, including taking the other's life if this is what it takes.
This is critical since it defines one major line between Aikido in the dojo and self defence. Aikido training has its stated objectives based on the dojo you attend, self defence training however is to survive by whatever means necessary, it is quite different and cannot be copied in its entirety in a training environment, knife or not. Those folks like RMCAT etc. who do scenario training come close to recreating some of the threat levels that one may experience, but these are also limited in scope. A lot of what differentiates Budo from self defence has to do with mindset and what your ultimate objective is. The same goes for Budo and combat. There is no guarantee that what you do in the dojo can be transferred to a real life situation, good or bad. Each situation is different and when your life is on the line strange things can happen to either help or hinder you.
Just my 5 cents.