Hipsters can be easily identified by their excessively portrayed personalities and attitudes of being "too cool for life," as well as their belief that they are "cooler" than others, all of whom in their eyes who follow trends/the mainstream (which is somehow not the same as hipsters following the hipster trend). 97% of all hipsters are hypocrites.
Hipsterism is highly contagious and can quickly spread to others if there is a high volume of hipsters present. Thus, if you live in an area with a high density of hipsters, the stores, restaurants, etc. will tend to reflect their tastes/lifestyle. Interestingly, despite being the trendiest of trends, neighborhoods that have suffered from hipsterism have generally increased in property value.
Hipsters frequently dress in the same general manner, despite describing that manner has being unique/individual. This usually includes vintage clothing, clothing from thrift stores, ironic clothing, plaid, tight pants, metro-sexual clothing, clothing meant to appear ragged/poor (despite it's wearer being middle to upper-middle class and receiving all their money from wealthy parents in the form of an allowance, rather than working/living in reality), etc. They may also wear unnecessary accessories such as scarves during the summer, sunglasses indoors, etc.
Hipsters are also associated with indie music, contemporary art, etc. Unfortunately, their attempts to turn away from the mainstream and "kitsch" to a more bohemian-like lifestyle has ruined much of what they now claim as theirs (ie: indie music is now dominated by a scene and has little to do with the actual music, contemporary art is plagued with over dramatic plays and poor work/weak conceptual ideas, coffee shop atmospheres are ruined by their judgmental attitude towards all non-hipsters, etc.) In essence, the things they helped to build have lost all value and meaning, but that is appropriate to the apathetic, lack of originality that is possessed by all hipsters.
Knowing the truth about what they are, most hipsters will deny that they are a hipster. However, it should be noted, there are some people who fit the hipster description and are legitimate in their interests, activities, and lifestyle, but this is extremely rare.
Despite their likely denials of being a hipster, and a belief in rugged individuality (which has turned into a conformity apart from "mainstream conformity"), to be a hipster, one must win the approval of other hipsters. Thus, it is impossible for a naturally "non-coo" person to ever achieve hipster status. This of course, is yet another contradiction. Over all, hipsters lead a judgmental, elitist lifestyle, as aforementioned, with a strong conviction in the belief that they are "cooler than life."
For some reason, hipsters like Pabst Blue Ribbon, possibly one of the worst, most watered-down beers available... Apparently it's cool to have bad taste, an important detail to remember for any aspiring hipster.
If one is at all unsure of whether a person is in fact a hipster, the yuppie/douche test never fails. If the person comes across in any way as a pretentious, hypocritical, yuppie douche, they are probably a hipster.
An example of where to find hipsters:
Wicker Park/Bucktown, Chicago