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The current issue of the magazine Lonely Planet India(Oct 2013) presents a photo of Camargue Horses which are white coated and mentions that they are born with dark hair. A search shows that the foal are either black, grey or brown coated and gradually turn white around the Third/fourth year. What could be the possible advantage of that kind of difference between the young and the adult?

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I will have to do more research into the Camargue, but many animals have pigment changes over time just because they haven't developed the melanocytes to have adult coloration. It simply isn't advantageous to spend energy on coloration when you're growing bone. And sometimes the melanocytes are hormonally stimulated. A possible behavioral selection could be something like "foals are not seen as mate competition until their color changes," and thus avoid competitive behavior of say a large alpha male. –  Atl LED Oct 7 '13 at 20:46

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Our own hair will also turn gray (indeed, yours seems to be on its way, if you don't mind me saying so) but there need not be an advantage to that; if it doesn't affect our ability to have successful children it probably doesn't matter much to evolution or selection. When it comes to animals that interact with humans, though, many traits are selected for, even those without an advantage, in fact often we select for disadvantageous traits (if they were advantageous, we might not need to select for them in the first place).

As this 2008 paper from Nature Genetics goes into, the "graying with age [phenotype] is an autosomal dominant trait" overwhelmingly caused by "a 4.6-kb duplication in intron 6 of STX17 (syntaxin-17) that constitutes a cis-acting regulatory mutation". To answer your question, though:

The Gray horse provides a notable example of how humans have cherry-picked mutations with favorable phenotypic effects in domestic animals... The prestige of riding a white horse has thus led to selection of the Gray-causing mutation by humans; this mutation is by far the most common cause of white color in horse.

This phenotype is actually often detrimental, as white/gray horses can have eye problems and higher rates of skin cancer; Camargue's are particularly susceptible to melanomas, present in around 70% of horses by age 15. There does seem to be some benefit, though, as the second paper I linked suggests these horses are subject to fewer fly attacks.

EDIT: I seem to have been unclear and you seem to have misunderstood my answer. Let me break it down:

That is an example of why something negative or pointless might persist, as would a dominant inheritance pattern that is fixed in a population: negative traits that are only weakly deleterious have a non-negligible chance of fixation. Asking what the advantage is is somewhat of a moot question because every single Camargue horse has the trait; asking what caused a seemingly-negative phenotype to become fixed is a good question, but likely an unanswerable one as it occurred long ago.

As a side note, how long a breed has been in an area does not simply imply breed purity. Here's a quote from the International Museum of the Horse:

Through the centuries many armies have passed by the Camargue, including the Greeks, Romans and Arabs. The horses brought with these armies influenced the Camargue over time. It has even been suggested that the Camargue has had some influence on the early breeds in Spain as armies took them back home.

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Your answer is not acceptable. 1. The Camargue Horses are neither 'cherry-picked' or cross bred. Read these quoted lines from Wikipedia "The Camargue horse is an ancient breed of horse indigenous to the Camargue area in southern France. Its origins remain relatively unknown, although it is generally considered one of the oldest breeds of horses in the world". –  Ram Manohar M Oct 7 '13 at 19:34
    
2. You are suggesting that the hair of the horse ages before the horse even before it reaches puberty? There has to be a better explanation. It looks like you have cherrypicked the answers. Is it possible to get an answer from someone with some insight in this site? –  Ram Manohar M Oct 7 '13 at 19:47
    
@RamManoharM I expanded my answer, but I don't know where you find reason to accuse me of "cherry-picking" or find a mention of puberty. I simply mentioned our own hair color as an example of seemingly-drastic changes that need not be selected for. –  Amory Oct 7 '13 at 21:04
    
@RamManoharM 2 might not be to far off. It's almost certainly related to the KIT gene (CD117, dealing with the SCF). Early coloration being caused by in utero influences on the cells, but the later lack of coloration is cause by the failure of melanocyte migration. –  Atl LED Oct 7 '13 at 21:04

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