Golf tees are only used on the teeing ground on a golf course. Today's technology means that larger faced woods require the ball to be higher off the ground to enable the sweet spot on the woods face, particularly the driver, to make contact with the centre of the ball. On many drivers and as a rough guide only, the sweet spot is located mid way between the horizontal centre line of the club face and the top of the club face so the ball needs to be high enough to meet with this spot. Another reason to tee the ball up is that a sweeping clubface where the driver sweeps the ball upwards off the golf tee will produce less ball spin and therefore the golf ball will carry further.
As a guide when a golf ball is teed up for a driver shot, the top edge of the driver should be at the very least level with the equator of the golf ball when on the golf tee. So not all woods are the same face height, and the tee height will also affect the golf balls spin and distance, so a longer golf tee is required to be able to meet these needs.
However it's not only a wood that golfers can play off the golf tee so if the shot requires an iron off the golf tee then a high tee makes no sense. So a shorter golf tee is required and therefore varying lengths according to the type of shot you wish to play are required. The lower the golf tee often results in a more descending blow. If a weak high fade is required it might help to move the tee more forward in the stance and tee up the ball a little higher.
A common size for wooden golf tees is 70mm. Also 54mm and 83mm sizes are usually easily available from most sources. In addition plastic golf tees which can be purchased as straight tees just like wooden tees or graduated tees sometimes called castle golf tees can be used. The graduated tees in plastic (or wood) come in various lengths and these provide a more consistent and repeatable tee height as the collar on the tee stops when it hits the ground and are also more robust and longer lasting golf tee than wooden tees, but they do not break down as well (not as biodegradable) as wooden tees so plastic golf tees are not the favourite of many green keepers.
So in conclusion golf tees could be used in one single long length and pushed into the ground to any desired height, but it's easier to use longer tees for say the driver off the tee and shorter tees for irons off the golf tee or for shots that require the ball to be closer to the ground. Graduated or castle golf tees come in various lengths and the collar helps to tee up the ball to a more consistent height.
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