I don't think I'm a yarn snob. My all time favorite yarn for making doll bodies remains Red Heart Super Saver or Classic worsted weight yarn. It is easy to crochet tightly, makes a strong fabric and creates great three dimensional shapes. It wears like iron, and is easy on the pocket book. An eight ounce skein of Super Saver will make four Free Spirit dolls, so at $2.50/skein, that is only 63 cents a doll. What a bargain!For hair, however, I must confess I love wool. And when I get a little extra pocket change, that is my yarn of choice for any and all doll hair. Recently I found a luscious wool/tencel blend at my local yarn shop. It is made by Berroco and is called Lustra. It is 50% Peruvian wool and 50% Tencel, in a single ply (which I love the look of for hair). It will make lovely shiny hair with that wonderful wool tactile feel. I can hardly wait to use it! Below are four colors that I couldn't resist. At $9.00 for a 3.5 oz skein, it isn't cheap, but will probably make two or three wigs, and since we saved so much money on the body yarn, a little splurge on hair is okay :-)
More yarns that I love for hair are shown here; another Berroco yarn called Peruvia, which is a 100% Peruvian single ply wool. An Alpaca/wool blend; a kid mohair/silk blend lace weight, which is too fine to use by itself but blends wonderfully with anything to add highlights and 'hairy-ness.' Also included here is a mohair yarn, which is the best for yarn hair that closely mimics real hair.
A trip to your local yarn shop, if you are fortunate enough to have one close, will yield a gold mine of possible yarns for hair. There are also many places on the internet to get good yarn hair. A Child's Dream Come True is one of my favorites for mohair and single ply wool (they carry Brown Sheep Lamb's Pride, very similar to the Berroco Peruvia).