This has been verified by photography.
In fact, since you are observing the Moon from a round Earth, the Moon is closer to you ( by about the radius of the Earth ) at the zenith than at the horizon and thus appears slightly larger when it is overhead, just the opposite of the Moon Illusion.
The apparent size difference has been recorded since the 7th century BC and appears in the writings of the early Greeks and Chinese cultures. There have been attempts to make the Moon Illusion real by invoking explanations about refraction of light going through "more atmosphere" or "vapors" in the atmosphere when the Moon is on the horizon.
Ptolemy developed a full refraction theory of the illusion and additional publications on refraction as the explanation continued into the 17th century. Despite its rejection by scientists since that time, the refraction theory is often offered by laypersons today as the reason for the effect. It should also be pointed out that the actual effect of atmos pheric refraction is to "squash" the Moon ( or the Sun ) slightly along its vertical axis when near the horizon. Thus, it actually has a smaller cross-sectional area near the horizon!
Despite attempts at a physical explanation, the Moon Illusion is not a physical phenomenon. it is a psychological phenomenon.
A satisfying theory upon which all can agree is not yet available, however. Much debate has occurred in the literature and has included such luminaries as Aristotle, Ptolemy, Roger Bacon, Leonardo da Vinci, Johannes Kepler, Rene' Descartes, Christiaan Huygens, Jean Biot, Thomas Young, Karl Gauss, David Brewster and Hermann Helmholtz. Debate still continues in the literature and an entire book has been published on this effect ( M. Hershenson (Ed.), The Moon Illusion, Erlbaum, Hillsdale, N.J., 1989 ).
Theories that have been suggested include those involving comparisons with buildings and other objects on the horizon ( although the Moon Illusion also occurs over open water, ) differences between apparent size when looking horizontally and looking vertically, apparent size effects caused by apparent distance estimations, etc.
According to Hershenson, there are at least eight major explanations proposed for the Moon Illusion.