Why do stars appear higher than they actually are?

Light coming from the stars undergoes refraction on entering the Earth’s atmosphere. This refraction continues until it reaches the Earth’s surface. This happens because of uneven heating of atmospheric air. Hence, the atmospheric air has changing refractive index at various altitudes. In this case, starlight continuously travels from a rarer medium to a denser medium. Hence, it continuously bends towards the normal.

The refractive index of air medium gradually increases with a decrease in altitude. The continuous bending of starlight towards the normal results in a slight rise of the apparent position of the star.

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