The short answer:
When one knows in the depth of her soul that she is beautiful and is presenting herself in an artful and appropriate way she feels more alive, attracts lively well-integrated people, and has more positive and effective personal and professional relationships.

The long answer:
Before I address the specific impact of what one wears both psychologically and physiologically the fundamental questions need to be answered: Does the choice of clothing support a seamless integration between the clothes and the experience of the person? Do the clothes look like they 'belong' on that person? Is there visual integrity between the person and the clothing?
The observer wants to experience the whole of the person, and not be distracted by clothing, hair, or makeup that is out of context or harmony. In order for a seamless integration to take place the following factors need to be in alignment:
:: A choice of color/s that relate to 1.) the inherent coloring of skin, hair, and eyes, 2.) the resonance and timber of the voice, 3.) the movement and energy of the body, 4.) the personality of the individual, and 5) the goals for the situation.
:: A choice of clothing design that encompasses the line and shape of the body (fabric drape and silhouette), line and shapes in the face (accessories and prints and patterns), scale of the bone structure (construction scale), scale of the facial features relative to face size (accessories and prints and patterns), texture (fabric weave and loft)
:: A choice of clothing styles that relates to the inherent personality
:: A choice of clothing type that supports the lifestyle and personal goals

After all of the above is in place then the initial question can be answered.
:: If there is visual authenticity, the person will be believed.
:: If there is no visual authenticity, then the impact of words spoken will be greatly diminished.
:: When one is believable there is an enhanced sense of well-being.
:: When one visually out of balance the sense of well-being is diminished. Every person intuitively knows this lack of visual balance.
:: When one does not experience personal beauty a dullness settles upon the soul that radiates to all contacts.

Yet another information layer:
What one chooses to wear affects response
When one wants to
:: Attract trust ... Choose colors related to the hair, skin, eyes, and voice.... wear dominant personality style statements
:: Stand out in a dramatic way .... Choose more intense colors, or unusual color combinations ... wear more extreme style details
:: Be understatedly elegant ... Choose lower contrast neutralized colors ... wear more drape or ease in the clothing
:: Highlight your femininity ... Choose softer colors related to your skin tones and reds ... wear easy access and/or soft touchable fabrics
:: Get the job done efficiently ... Choose crisp white paired with vibrant colors or deep neutral colors ... wear crisp fabrics and clothing styles that hold the body