Goose bumps are a temporary local change in the skin. The chain of events leading to this skin change starts with a stimulus such as cold or fear. That stimulus causes a nerve discharge from an involuntary portion of the nervous system called the sympathetic nervous system. The nerve discharge causes contraction of little muscles called the arrectores pilorum (the hair erector muscles). Contraction of these muscles elevates the hair follicles above the rest of the skin. And it is these tiny elevations we perceive as goose bumps. Why humans ever came to need goosebumps is uncertain. Some biologists believe that goosebumps evolved as part of the fight-or-flight reaction along with heart rate increases that send the heart racing while blood rushes to the muscles to give them additional oxygen. A similar phenomenon, bristling, in fur-covered animals may have made them look larger and more frightening and kept them warmer by increasing the amount of air between hairs which traps body heat. But in people there seems to be no practical purpose for goosebumps except, of course, to make our skin crawl! Reference Link: http://www.medicinenet.com/script/main/art.asp?articlekey=6842

Its got to do with us evolvoleving from apes. when hary apes get cold there fur stands up on end which makes more insulation. now humans are harless apes but we stiill have those muscles that made apes hair stand up.

Goose bumps (AE), also called goose pimples, goose flesh (BE), chicken skin (Hawaiian Pidgin), or cutis anserina, are the bumps on a person's skin at the base of body hairs which involuntarily develop when a person is cold or experiences strong emotions like fear or awe. The reflex of producing goose bumps is known as horripilation, piloerection, or the pilomotor reflex. It occurs not only in humans but also in many other mammals; a prominent example are porcupines which raise their quills when threatened. Goose bumps are created when tiny muscles at the base of each hair, known as arrectores pilorum, contract and pull the hair erect. The reflex is started by the sympathetic nervous system, which is in general responsible for many fight-or-flight responses. Goose bumps are often a response to cold: in animals covered with fur or hair, the erect hairs trap air to create a layer of insulation. Goose bumps can also be a response to anger or fear: the erect hairs make the animal appear larger, in order to intimidate enemies. This can for example be observed in the intimidation displays of chimpanzees, in stressed mice and rats, and in frightened cats. In humans, it can even extend to piloerection as a reaction to hearing nails scratch on a chalkboard or listening to awe-inspiring music. Piloerection as a response to cold or fear is vestigial in humans; as humans retain only very little body hair, the reflex now serves no known purpose. In humans, goose bumps are strongest on the forearms, but also occur on the legs, back, and other areas of the skin that have hair. In some people, they even occur in the face or on the head. Piloerection is also a (rare) symptom of some diseases, such as temporal lobe epilepsy, some brain tumors, and autonomic hyperreflexia. Goose bumps can also be caused by heroin withdrawal. A skin condition that mimics goose bumps in appearance is keratosis pilaris. Goose bumps can occur only in mammals, since other animals do not have hair. The term "goose bumps" is therefore misleading: the bumps on the skin of a plucked goose technically do not qualify as piloerection. Birds do however have a similar reflex of raising their feathers in order to keep warm. http://en.wikipedia.org/wiki/Goose_bumps

Goose bumps (AE), also called goose pimples, goose flesh (BE), chicken skin (Hawaiian Pidgin), or cutis anserina, are the bumps on a person's skin at the base of body hairs which involuntarily develop when a person is cold or experiences strong emotions like fear or awe. The reflex of producing goose bumps is known as horripilation, piloerection, or the pilomotor reflex. It occurs not only in humans but also in many other mammals; a prominent example are porcupines which raise their quills when threatened. Goose bumps are created when tiny muscles at the base of each hair, known as arrectores pilorum, contract and pull the hair erect. The reflex is started by the sympathetic nervous system, which is in general responsible for many fight-or-flight responses. Goose bumps are often a response to cold: in animals covered with fur or hair, the erect hairs trap air to create a layer of insulation. Goose bumps can also be a response to anger or fear: the erect hairs make the animal appear larger, in order to intimidate enemies. This can for example be observed in the intimidation displays of chimpanzees[1], in stressed mice[2] and rats, and in frightened cats. In humans, it can even extend to piloerection as a reaction to hearing nails scratch on a chalkboard or listening to awe-inspiring music. Piloerection as a response to cold or fear is vestigial in humans; as humans retain only very little body hair, the reflex now serves no known purpose. In humans, goose bumps are strongest on the forearms, but also occur on the legs, back, and other areas of the skin that have hair. In some people, they even occur in the face or on the head. http://www.wikipedia.com

Goose bumps are created when tiny muscles at the base of each hair contract and pull the hair erect. The reflex is started by the sympathetic nervous system, which is in general responsible for many fight-or-flight responses. Source: http://en.wikipedia.org/wiki/Goose_bumps

I got this from www.wikipedia.org: Goose bumps , also called goose pimples, goose flesh, chicken skin, or cutis anserina, are the bumps on a person's skin at the base of body hairs which involuntarily develop when a person is cold or experiences strong emotions like fear or awe. The reflex of producing goose bumps is known as horripilation, piloerection, or the pilomotor reflex. It occurs not only in humans but also in many other mammals; a prominent example are porcupines which raise their quills when threatened. Goose bumps are created when tiny muscles at the base of each hair, known as arrectores pilorum, contract and pull the hair erect. The reflex is started by the sympathetic nervous system, which is in general responsible for many fight-or-flight responses. Goose bumps are often a response to cold: in animals covered with fur or hair, the erect hairs trap air to create a layer of insulation. Goose bumps can also be a response to anger or fear: the erect hairs make the animal appear larger, in order to intimidate enemies. This can for example be observed in the intimidation displays of chimpanzees[1], in stressed mice[2] and rats, and in frightened cats. In humans, it can even extend to piloerection as a reaction to hearing nails scratch on a chalkboard or listening to awe-inspiring music.[3] Piloerection as a response to cold or fear is vestigial in humans; as humans retain only very little body hair, the reflex now serves no known purpose. In humans, goose bumps are strongest on the forearms, but also occur on the legs, back, and other areas of the skin that have hair. In some people, they even occur in the face or on the head. Piloerection is also a (rare) symptom of some diseases, such as temporal lobe epilepsy, some brain tumors, and autonomic hyperreflexia. Goose bumps can also be caused by heroin withdrawal. A skin condition that mimics goose bumps in appearance is keratosis pilaris. Goose bumps can occur only in mammals, since other animals do not have hair. The term "goose bumps" is therefore misleading: the bumps on the skin of a plucked goose technically do not qualify as piloerection. Birds do however have a similar reflex of raising their feathers in order to keep warm.