It's the time-of-flight difference between when the one ear receives the wave front and the other from a change in the sound that gives us the directional information.
That's part of it, the other part is the head related transfer function is the change in response of sound due to diffraction effects caused by the head, upper torso and pinnae. The pinnae also help us to judge elevation.
That's part of it, the other part is the head related transfer function is the change in response of sound due to diffraction effects caused by the head, upper torso and pinnae. The pinnae also help us to judge elevation.