Humans can accurately localize where a sound is coming from around us. This good localization ability can occur even in unfavourable conditions where there is noise in the background, except when the noise is very loud.
One major cue that we use to locate the position of a source of a sound around us is the difference in sound levels at the two ears – the inter-aural level difference (ILD).
Imagine a sound coming from different locations around you. When the sound comes from one side of the head, it will sound louder in the ear on that side of the head and softer in the other ear. When the sound comes from the other side of the head, these perceptions are reversed for the two ears. Finally, when the sound comes from directly in front of you, it will sound equally loud in the two ears.
This occurs because the head and body cast an acoustic "shadow" and block some sound from getting from one side of the body to the other side. Thus, when the sound is coming from directly in front of you, this block doesn't occur, and the sound seems (and is) equally loud in the two ears. Otherwise, when it comes from one side or the other of the midline, it seems (and is) louder in the ear nearer the sound and softer in the other ear. Thus, ILDs are important for sound localization in azimuth.