When tracking an aircraft flying overhead, ATC said traffic was 2 miles, but PCAS showed the traffic was 1.5 NM. Why the difference in range?

Your PCAS unit gives slant range based on true distance in three-dimensional space. This range is based off of received signal amplitude which gives an estimated range value.

Some aircraft such as airliners have twice the power output of most general aviation aircraft and will appear closer than in reality. Usually this distance shown is close to the distance shown for a GA aircraft once they are within 2 miles. However, it is not unusual to start picking up an airliner at 8-10 miles.