The Moon Illusion Explained
The moon illusion is an optical illusion in which the moon appears larger near the horizon than it does while higher up in the sky. This optical illusion also occurs with the sun and star constellations.
A popular belief, stretching back at least to Aristotle in the 4th century B.C., holds that the moon appears larger near the horizon due to a real magnification effect caused by Earth's atmosphere. This is not true: although the atmosphere does change the perceived color of the moon, it does not magnify or enlarge it. In fact, the moon appears about 1.5% smaller when it is near the horizon than when it is high in the sky, because it is farther away by up to one Earth radius and also because of atmospheric refraction, which makes the image of the moon slightly smaller in the vertical axis.
The difference in the perceived size of the moon can be attributed to the presence or absence of distance cues for the viewer. When the moon is at the horizon, we use such distance cues e.g. linear perspective, texture and other familiar objects to correct the retinal image for distance. At its zenith, however, there are no distance cues to correct for distance. So while distance cues are used to correct the retinal image of the moon on the horizon, the retinal image of the moon at its zenith remains uncorrected.