Interaural time and intensity disparities (ITD and IID) are the two cues to sound lateralization. “Time-only” hypothesis claims that an IID is first converted to an interaural afferent delay (Δt), and is then processed by the central ITD mechanism, rendering a separate IID processor unnecessary. We tested this hypothesis by assessing the contribution of the cochlear latency effect to the psychophysical ITD/IID trading ratio. Auditory brainstem responses (ABRs) were used to measure the interaural afferent delays (Δts) that developed with a 20/sec dichotic click train used in the trading experiment. Except for small IIDs at low loudness levels, the physiological Δt delay produced by an IID was significantly smaller than the ITD psychophysically traded for the same IID. We concluded that the cochlear latency effect alone cannot explain the psychophysical ITD/IID trading ratios and a separate IID mechanism must be involved.