To get to the bottom of the mystery, the Associate Professor James Dale of Massey University, with colleagues from Australia's Monash University and Germany's Max Planck Institute for Ornithology, analysed the colouration of nearly 6000 species of passerine birds.
Better known as songbirds, this group comprises more than half of all bird species.
First, the researchers developed a new way of measuring colourfulness that indicated how male-like or female-like the plumage was in each sex of each species.
This allowed them to measure whether males were more colourful than females, whether both males and females were drably coloured, or whether both males and females were colourful.
The measurements then allowed the researchers to identify the evolutionary drivers of elaborate colouration in both sexes.
They found colour to be important for competition between individuals - not just between males, as sexual selection theory would suggest - and in areas where females had to compete for resources or mates, or help defend their territory they, too, were brightly coloured.
When environmental or social pressures on females were relaxed, they lost their bright colouration.
Finally, the researchers showed that although sexual selection does increase colouration in males, it actually has a greater effect in decreasing colouration in females.
This demonstrated that a key evolutionary pattern was for colouration to decrease in females when it was not needed - the opposite pattern to what was previously thought.
Associate Professor Dale said that traditionally, studies had focused on male colouration, which left much of the variation in colour between species unexplained.
"A shortfall of the classical sexual selection theory is that it works so well at explaining colourful plumage in males that the rest of the variation is often forgotten about," he said.
"Our research demonstrates that bright female plumage is also functional and very important."
"This is also the first study to clearly show that tropical species are more colourful than birds from other regions on earth."
This did, however, beg the question about what exactly it was about the tropics that favoured more colourful plumage.
"We suspect that competition is fiercer in tropical environments, but more research is needed."
The next steps would be to see whether this trend was seen in other groups of birds and to evaluate the potential evolutionary costs associated with colourful plumage.