Why We Have Hair

Human evolution
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Q: This might sound like a stupid question, but why do we have hair on our head? What is the purpose of hair on your head? Is it only there to keep our head warm?
A: As with the traits of any animal, we have evolved in certain ways based on our environment and the need to adapt to that environment. The hair on our heads provides warmth for cooler seasons (since we lose approximately 25% of our body heat through our scalp). The hair on the head also provides protection from UV rays, and from minor injuries.
Our earlier ancestors (evolutionally speaking) had much more hair on all parts of their bodies. But with technological advancements (learning to make and tend fires, finding or making shelter, etc.) we became better able to withstand our environment and the need for the excess of hair began to decrease. Those individuals who were born with less hair were just as able to survive, and therefore their subsequent generations had less hair.
Hair remained in specific locations because it served other purposes. The armpits and groin retained hair because those areas are key heat-release zones (as evidenced by the practice of using tepid compresses at these areas to reduce fever quickly). The hair in these areas serves as a lubricant for the joining points of the body and prevents chafing of the skin because of the friction of the areas rubbing together.
The scalp also may have kept hair because it helped the body retain heat, but there is also the likelihood that the hair of the scalp was seen as esthetically pleasing and therefore attracted a mate more readily.
See also:
Why men prefer long hair
Does a man's hair grow faster than a women's hair?
Hereditary hair color and how parents determine a baby's hair color