David_Gerard comments on Why Real Men Wear Pink - Less Wrong
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All good points, although I'd like to throw in a couple of my own. We see that fashion is very important almost universally in Western society among teenagers and, to a slightly lesser extent, young adults. This is a group of people who do not yet have enough skill or knowledge to successfully signal their status in the same ways that adults do: although there is stratification in skills and knowledge, it's relatively small to the wide variation that will appear in adulthood (mostly due to people pushing their skills and knowledge to have higher value, thus shifting the mean, rather than a general dispersion where an equal number of people get less skilled and knowledgeable as get more skilled and knowledgeable). But fashion is something that is well within the reach of teenagers and young adults to use for more stratified status signaling. The story then plays out as described in the post.
At this point in my life, I find fashion to not be very important except in one regard: signaling class. I work at a university providing instructional support to faculty by running and maintaining some computer assets (vague enough for you). Around campus, clothing is used to signal a persons class within the university: student, grad student, staff, professional staff, administrators, and faculty. The clothing choices are roughly as follows:
Aside from the undergraduate students, no one really uses fashion beyond this for signaling purposes, or at least if they try to such attempts appear to be ignored. Instead other status signals are important: skills, knowledge, job performance, credentials, etc.. Just don't wear the wrong class of clothes, or else you'll be ridiculed by your class peers and confused for the wrong class by strangers (which is sometimes what people try to do by dressing up from their class, but this is usually regarded as bad behavior by class peers as being overdressed).