Estrogen, as I discuss below, is intimately related with many aspects of female sexual health. And us guys are interested in any and all things dealing with female sexual health, eh?
To begin with, estrogen is associated with sex drive in women. Estrogen plays a somewhat analagous role to testosterone in males in the sense that testosterone is a “mood elevator” and gives us guys the confidence and drive that we need in the bedroom. Estrogen, likewise, is very important to her libido and sex drive. 
Most men know this indirectly, because they know what a couple of drinks can do to a female’s libido. Beside decreasing “inhibition”, alcohol definitely raises – actually “prolongs” would be a better word – a female’s estrogen levels. (It does the same to males also!) Estrogen even acts on her genital area making sex feel, well, way better and is a “sensation heightener” as well.
So then if you want to raise a woman’s flagging libido, you just put her on Hormone (Estrogen) Replacement Therapy, right? Actually, this question is where the story of estrogen and female libido gets even more interesting. Remarkably, it turns out one of the side effects of female Hormone Replacement Therapy is actually decreased libido in the case of a large percentage of women. Researchers have found that “The Pill” actually greatly increases SHBG and, as you hopefully know from my link on Free Testosterone, that decreases free testosterone.
CAUTION: Depo-Provera was shown in an International Journal of Obesity study to put an average of 13 pounds on female users!  And the Ortho Evra Patch is just as scary: it puts out about 60% more estrogen than most other birth control pills, putting the average females at tremendous risk.  (Yaz, the new no-period pill, has BOTH of the above side effect profiles!) In addition, Depo-Provera has been shown in several studies to result in bone loss and, even worse, a bone loss that may be irreversible. 
This decrease in free testosterone – testosterone is also important for a woman’s sex drive  – is what many researchers suspect is the culprit in the decreased libido that so many women experience with oral contraceptives.  In fact, the lead researcher (Claudia Panzer, M.D.) of that study estimates that “about half of women experience a change in libido”.  If your woman does not want sex, you may want to consider a different form of contraception!
Some doctors will actually recommend supplemental testosterone for some women experiencing low libido. Yes, testosterone is a libido booster for her just like it is for you. So, if her libido is flagging and you’ve ruled out the other standard possibilites, you may want to ask her doctor if supplemental testosterone would help.
I should mention, though, that there was at one time some controversy as to whether supplemental testosterone for women could lead to an increased risk of breast cancer.  The latest study shows this not to be an issue , but you’d definitely want her to discuss this with her doctor.
There is an “underground” movement pointing out that all these counterintuitive results from female hormones are because they are NOT bioidentical. That’s right – you, big fella, almost always get bioidentical testosterone when you get HRT, but your women will find it difficult to impossible through her doctor. Why? The reason is simple: anything bioidentical is not patentable.
Big Pharma, realizing they could not patent true estrogen (and progesterone) decided to slightly alter it in order lock in patent protection and make solid profits. Critics charge that it is these slight alterations, all for the sake of a patent, in the estrogens that cause many of the studies to go awry since they are no longer “natural”. And it is suspicious that HRT (Hormone Replacement Therapy) in males, which is in general bioidentical, has done so well compared to the female studies where there have been all kinds of issues. It is also disconcerting by almost any standard of logic to think about the fact that the woman you live, trying to improve libido, use contraception or decrease the symptoms of menopause, is forced to use synthetic, non-natural versions of estrogen just for the sake of Wall Street.
NOTE: Historically, some cultures have used the urine of younger females to decrease symptoms of menopause. Maybe there is something to it: one of the best-selling synthetic estrogens, Premarin, is derived from Horse Urine.
These sorts of concerns have fueled the rapid growth of an “underground”, bioidentical-estrogen movement: compounding pharmacies have created bioidentical estrogens and progesterones from plants such as soy. According to critics of Big Pharma, women do much better on these bioidentical forms.
As noble as the bioidentical hormone movement is, I would still urge some caution: there is considerable evidence that any estrogen, natural or not, can increase breast cancer risk. For example, drinking even one drink per day, which merely increases the amount of time that estrogen remains in one’s system, is tied to an increased breast cancer rate in females. And higher estrogen without hormone replacement therapy is also associated with risks as well.
This is in direct contrast, with the situation for males where youthful testosterone levels are not associated with increased prostate cancer levels. Every female will have to do her own research and weigh the options with her doctor: it is actually a very involved decision. In other words, don’t just go with what Oprah and Suzanne Summers say: they’re not giving you all the facts. You may even want to read this US News and World Report interview that discusses what the European studies actually say about bioidentical estrogen.
NOTE #2: Non-bioidentical estrogens have been linked to brain shrinkage , breast cancer  and a host of side effects. Furthermore, pesticides and fungicides are increasingly being correlated with thyroid disease as well. One 2009 study based in Nebraska found that women exposed to the most of organochlorine pesticides and fungicides were much (40%) more likely to develop hypothyroidism, which results often in weight gain, loss of libido and other serious medical conditions. 
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8) J Clin Endocrinol Metab, Apr 1995, 80(4):1429-30, “Twenty-four-hour mean plasma testosterone concentration declines with age in normal premenopausal women”
9) Endocrine Abstracts, 2007, 13:P286, “Effect of Glycaemic index of the diet on salivary cortisol and testosterone levels in females”
10) Fitness Magazine, May 2006, p. 52
13) http://www.foxnews.com/story/0,2933,466786,00.html?loomia_ow=t0: s0:a16:g12:r3:c0.336868:b25653392:z10
14) Fitness, April 2006, p. 48
15) The J of Pediatrics, Nov 1996, 129(5):671-676, “A prospective comparison of bone density in adolescent girls receiving depot medroxyprogesterone acetate (Depo-Provera), levonorgestrel (Norplant), or oral contraceptives”; For a complete list of references, see http://www.reproductiveaccess.org/resources/ contraception/hormonal/depo_boneloss.htm
16) Maturitas, Dec 10 2004, 49(4):267-275, “Postmenopausal testosterone therapy and breast cancer risk”
17) Journal of Sexual Medicine, Published Online: 24 Apr 2009, 6(7):1850-1856, “The Incidence of Invasive Breast Cancer Among Women Prescribed Testosterone for Low Libido”
18) New England Journal of Medicine, Nov 6 2008, 359:2005-2017, “Testosterone for Low Libido in Postmenopausal Women Not Taking Estrogen”
19) American Journal of Epidemiology, 2010, 171(4):455-464, “Pesticide Use and Thyroid Disease Among Women in the Agricultural Health Study”