According to Thompson, the top of the sporran should be about one hand (4 inches) from the top edge of the kilt.

This is about where I wear mine, as I find it the most comfortable position. However, as I've inherited my waistcoats and haven't had them converted to my size (I hardly ever wear a waistcoat, and am probably too mean to get ones made or these adjusted), when I wear one I let the sporran hang lower which I find annoying.

Perhaps I should spend some money?