I think you have it backwards.

Build and promote sites on subjects you know, not on what you think will generate adsense income.

Pay attention to what areas generate income and build those up in order to increase traffic (and income).

Ten X $0.10 produces the same income as one X $1.00

You can probably find lists of high paying keywords out there but the competition will be fierce, if not impossible if you don't already have a 10 years old site on the subject that got all its links when the web was new and webmasters were freely giving them.

As for finding the "just right" niche that pays decently but the competition is moderate, asking about them is like asking a good card player his methods, a great chef his recipes, a magician his tricks, etc. Nobody will just tell you "oh, to make a lot of money, you just need to do this and that." It just doesn't happen.

What's left is being the best at writing about something you know about, and make sure to consider "what would be the advertisers interest in displaying ads on this topic". In other word, do consider the potential commercial demand.

And yeah, avoid topics that mainly interest kids and teenagers. They don't have credit cards (hard lesson here, hehe).

yeah right, if I know the right topic I won't share it with rest of the word. Plain and simple.

As koan suggested create a site for sharing something and not just gaining back something (rule #1); money will follow automatically (rule #2). Rule # 3 read rule #1 again :P

Why not use Google Trends to compare relative traffic on different keywords on subjects you're interested in, then go on from there.

You have to remember that many people have no specific hobby or interest, they are still trying to "find themselves" I guess. For them, a list of topics to choose from would be good. A program like Good Keywords would at least tell you a rough idea of what people are searching for. First things first, if few are searching for your topic, and you are not the best in your field, better seek out a different topic.

Go for anything related to shopping where your visitors have credit card in hand, the real trick is in getting good traffic not AdSense.

Ditto what willybfriendly wrote above.

And on a related side note, what if Google were to re-word their main AdSense page to make AdSense sound less like a moneymaking scheme and increase the barriers to entry? I wonder if that wouldn't reduce the demand on support and enable them to provide better & timely responses to publishers?

FarmBoy

If you come up with something you know a little about and can become the authority on that something^* you'd be amazed at some of the niches where you can actually make money. I know I never expected to make any serious money at some of the things I have up now.

^* the quickest way to make yourself an authority on something is to tell everyone you are, and then act like it. Case in point: SEO blogs.

the quickest way to make yourself an authority on something is to tell everyone you are, and then act like it.

Yep. Lots of authorities or experts earn a good living simply because they know something someone else doesn't know.

FarmBoy

Or there's a perception that they do.

Do a search on niche inspector and you'll get a head-full.

Two of my niches were found by following the daily news. I try to listen/read fairly carefully, and have developed a kind of nose for topics that have "legs"... that is, which repeat on a regular basis.

Its nothing really hard or special, and I am sure anyone can develop the same approach. All it takes is a daily newspaper and a tv or radio, and a little time each day.

After getting an idea, however, you can't just go charging in and develop a worthwhle site. IMHO this only works when you find something, and either know quite a bit about the subject, or are committed to the work of researching and learning about it. It takes time, of course. About a year, in my personal experience.