Psychoacoustics is the study of the relationship between physical sounds and the brain's interpretation of them. Until recently, psychoacoustics has devoted more attention to the behaviour of the peripheral auditory system than to the details of cognitive processing.
The discipline is a branch of psychophysics in that it is interested in the relation between sensory input stimuli and the behavioural or psychological response that they provoke. Because of individual variations in observed responses, statistical results are most often achieved.
Some of the traditional psychoacoustic concerns involve the perception of pitch, loudness, volume and timbre. Contemporary work involves higher level concepts such as auditory percepts, streaming, and auditory scene analysis. (Source - Barry Truax - Handbook for Acoustic Ecology CD-ROM Edition. Cambridge Street Publishing, 1999 - CSR-CDR 9901)