The human ear becomes less sensitive to weak sounds in the prescence of
louder sounds. This phenomenon is called masking. During the day, the
ambient noise level tends to be higher, because there are cars driving on
the streets, people walking by, doors opening and closing, birds flapping
their wings and singing, and so on. The prescense of all this sounds
during the day makes it hard to hear faint distant sounds, not because
their waves cannot travel as far, the waves travel just as far, but our
sensitivity to those sounds is impaired by the masking phenomenon. We
could say that the ambient noise "masks" your friend shouting in the
distance.

During the night, everyone is asleep, very few, almost no cars at all can
be seen driving by, most birds are asleep too, and it is generally more
quiet. Since it is so quiet, its also easy to hear a faint distant sound
very easily.

This difference between night and day can also seem to make echoes
louder. And again, echoes are not louder at night than during the day,
but, since echoes are distant and faint, just like any distant faint
sound, they are also masked away by louder ambient noise.

This important example shows us how an observation such as yours can be
very true: You can in fact hear distant sounds more clearly at night, but
the mechanism responsible for this observation can be very different from
what we expect.

By far the most important factor, however,
is a difference in the temperature structure of the lower few hundred feet of the
atmosphere between day and night.

Sound travels through cold, dense air more slowly than through warmer, less dense
air. When air temperatures change on the path along which sound waves are
traveling, the waves always bend toward the colder air.

By day, it's warmer near the ground and colder above; sound bends up and away from
the ground (and you). At night, it's colder near the ground and warmer above; sound
waves bend down.