The hair extension market is a multi-billion dollar business each year. While some women/men use synthetic hair, nothing beats real hair. Priceonomics.com touched on this industry(full story here) and one source where the hair comes from each year:

The Venkateswara Temple in Tirumala, India, had a problem. Thirty to forty million pilgrims visit the temple each year, and in a gesture of humility and sacrifice, 10% to 25% of them, men and women both, have their heads shaven. Every day, the Venkateswara Temple staff fills giant vats with human hair. 

When companies buy hair from the temple for as much as $700 per pound, it contains sweat, blood, and lice. The temple warehouses reek from mildew and fungus. Investigative journalist Scott Carney visited Tirumala and called the hair a “foul-smelling heap.” As 600 barbers each shave a head every 5 minutes, they leave bloody scalps and hair balls littering the floor. 

It takes someone in the industry to recognize why the hair is so valuable. Only long women’s hair is sold at auction—the temple sells men’s hair at a pittance for industrial uses—and since many pilgrims come from humble, rural towns, they have not used shampoos or styled and treated their hair in ways that damage it.