Does it really keep you cooler when its hot and sunny out?
Or does it being cotton and loose also have something to do with it?
Well a loose, cotton white shirt will keep you cooler than a loose, cotton black shirt in my experience. This is due to the white fabric reflecting much of the light, while the black fabric absorbs it, becoming very hot.
I once actually tried this, on a hot day I stood outside with a black shirt on, and then changed to a white shirt. The white shirt was much much cooler.
Try it out. A black shirt gets very hot in direct sun, since it absorbs heat. The white shirt absorbs less and is thus cooler. I find it very noticeable, so much so that I don’t wear black in the summer.
Yes, i know. I’ve gotten pretty sore with a black top on in the sun.
How about gray? 
The deal goes like this:
Hot in sunlight: Wear white to reflect the heat.
Hot out of the light: Wear black to radiate away the heat generated by your body.
Cold in the sunlight: Wear black to help absorb the sun’s heat.
Cold in the dark: Wear white clothes to reduce body heat loss from radiation.
Try out this link:
http://www.straightdope.com/mailbag/mblackcool.html
It’s got some good stuff in it…
But never wear white pants, shoes, or suit coat before Memorail Day or after Labor Day*. Which reminds me, we’re almost there, time to break out the white suit.
*Exception: if you are Tom Wolfe, you can wear a white suit any time of the year.
I’ve heard of this in the context of a Miss Manners/Etiquette sort of thing. Is there any rational, logical reasoning for it? I guess I’m just a fashion pariah since I wear whatever I have that’s clean and handy.
So…gray is best?
Black isn’t hot because it absorbs heat - it’s hot because it absorbs light. Sunlight’s about 1000 W/m^2, really quite alot of power for a human body to be intercepting.
Absorbing and radiating away heat (ie IR radiation with wavelengths like 5 or 10 um) depends on how well these wavelengths are absorbed vs. reflected, and that does not much correlate with how visible wavelengths (around 0.5 um) are absorbed or reflected.
Therefore, if you want to radiate away lots of heat, you can’t use visible color as a guide. If you want, you can look up “emissivity” and use that - numbers closer to 1 will radiate better, and numbers closer to 0 will do worse. Also, skin is very good at radiating away heat (regardless of visible skin color).