I found this article from Science World. Dr. Perry describes his thoughts or findings about why we have hair!
Personally, I think all mammals have hair for protection. From bugs, the elements, ect.
Anyhow, here's the article!
Why do we have body hair?
Science World , Sept 18, 2000 by Bruce Perry
WE ANSWERED! EXPERT DR. BRUCE PERRY REVEALS THE SHOCKING TRUTH BEHIND THE MYSTERIES OF SCIENCE.
The hair on our bodies is a characteristic of mammals (animals that nurse their young with milk). Hair plays many important roles--warmth and protection from germs for example. Hair also helps reduce friction--and thereby irritation--in skin-to-skin contact, like under your arms.
The most fascinating role of body hair, however, is to assist olfactory (relating to smell) communication. One of the most important forms of human-to-human communication is through scent. Your body releases chemicals called pheromones that create a unique scent to you. Newborn babies can pick out their mother's blouse from a group of blouses based on scent alone. A mother's pheromones can calm a baby even when mom is absent.
Body hair retains your unique chemical signature, allowing others to sense and respond to you. When afraid or aroused, your pheromones change. Most of us know that dogs can "smell" fear--and it's likely that humans can too.
Manufacturers spend billions of dollars a year to influence the ways we "smell" through perfumes, soaps, and deodorants--trying to make people more attractive to each other. Could you be drowning out some of your most powerful yet natural chemical "attractants"? The clean, natural scent bristling on your body hair is likely to contain the attractants people seek in perfumed potions.
DR. BRUCE PERRY is the Thomas Trammell Research Professor of child psychiatry at Baylor College of Medicine, and chief of psychiatry at Texas Children's Hospital in Houston. He has been consulted on many high-profile incidents involving traumatized children, including the Oklahoma City bombing and the Columbine, Colorado, school shootings.