Why does the moon on the horizon look bigger?

When the moon is low on the horizon you are looking through more atmosphere, but although this can have the effect of making the moon look orange (because blue light is scattered), and can distort the shape of the moon, this does not make it look bigger. Actually, it's all a matter of perception - you can see other objects near the moon, such as trees or building on the horizon, so your brain interprets the moon as being bigger. If you were to view the moon through a cardboard tube, and so cut out all the surroundings, you would perceive it as being exactly the same size as it is when you look straight up!