This article is from the MPEG FAQ, by Frank Gadegast phade@cs.tu-berlin.de with numerous contributions by others.
Well, for details you should study one of those AES papers
listed below. One main result is that for low bitrates (60
or 64 kbps per channel, i.e. a compression ratio of around
12:1), Layer-2 scored between 2.1 and 2.6, whereas Layer-3
scored between 3.6 and 3.8.
This is a significant increase in sound quality, indeed!
Furthermore, the selection process for critical sound material
showed that it was rather difficult to find worst-case
material for Layer-3 whereas it was not so hard to find
such items for Layer-2.
For medium and high bitrates (120 kbps or more per channel),
Layer-2 and Layer-3 scored rather similar, i.e. even
trained listeners found it difficult to detect differences
between original and reconstructed signal.
 
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