The PAX index is kinda like a handicap. In this case its a Multiplyer that you would apply to your raw time to get your Pax time. its one way you can compair how you did on a particlar course Vs some one in another class.
Example... A-mod is the Theoretical Fastest class in Solo 2, so it has a PAX of 1.000. Meaning an A-mod cars Raw time = their PAX time.
Compair that to STS, wich has a pax of .791.
So, If an A mod ran a course in 30 seconds, their PAX = 30 seconds.
If an STS car ran that same coures in 37 Seconds their pax would Be (37 X .791) = 29.267 In that instance the STS driver ran the course better then the A mod driver.
For some people, (myself included) PAX results mean alot. It determines for me how competitive my driving and my car are doing against others with more powerful machines. Sometimes, the numbers may appear "skewed" because of when the classes run in the day. i.e.-rubber on the course, heat of the pavement, temperature outside, etc. However, the PAX system is very fair in most cases. I love HS because the PAX is soooooo low!
Yes thinking is right on track. They determine it based upon the results of the national finals every year and make changes accordingly. You will find it at any SCCA event, at least in my neck of the woods. But the thing about it is that simply because my car has 1/2 the horsepower of SM2 and twice the weight of the CMod cars, i shouldn't be penalized or thought that I was not as good of a driver as the people driving those cars. This is the "Grading Curve" so to speak.
Its also a good way of compairng the performance of one car Vs another, as in... If one car is classed D-Stock, like a WRX and another car is classed C Stock Like a Miata 1.8, then it could be surmised that the C Stock car would be the faster car in a race, with the proper driver. (assuming its not a drag race that is)