Approved for public release, distribution is unlimited / This thesis examines the magnitude of the deterrence effect associated with the implementation of the "zero tolerance" policy in the U.S. military in the early 1980s. The estimation of the deterrence effect is based on the estimation of linear probability models (LPM). A difference-in-difference estimator is obtained by comparing pre- and post-policy differences in drug use rates in the military and civilian sectors. The thesis uses data on drug participation drawn from the National Household Survey of Drug Abuse and the DoD Worldwide Health Survey. The study investigates the deterrence effect for the military as a whole, for each branch, for various age groups, and two different measures of drug participation. The results show that a significant deterrence effect appears to have been associated with the implementation of the "zero tolerance" and drug testing policy, especially for the past year drug participation rates. Additionally, there is evidence that individuals above 25 years old who are more educated and married have smaller drug participation rates than the rest of the population. / Lieutenant Commander, Hellenic Navy