The relationship between narcissism and self-esteem Given that personality disorders are rooted in abnormal experience and development. There has been much discussion about the aetiology of Narcissistic Personality Disorder. Having a concept of the causes of such an illness is helpful in establishing the answer to my question. The common belief was that beneath the arrogance of a narcissist, is an incredibly low self-esteem, hence the need to protect the fragile ego.


  Those with narcissistic personality disorder believe that they're
  superior to others and have little regard for other people's feelings.
  But behind this mask of ultra-confidence lies a fragile self-esteem,
  vulnerable to the slightest criticism.


Mayo Clinic

I can see that there is some discussion refuting this, and postulating the opposite.


  It was once thought that narcissists have high self-esteem on the
  surface, but deep down they are insecure. However, the latest evidence
  indicates that narcissists are actually secure or grandiose at both
  levels.


Psychology Today

I have wondered, how do we really know how the narcissist self-esteem is?
Is there an inverse relationship between narcissism and self-esteem or is the converse true?

Please provide a well researched answer.
First off, your second link there hasn't been reviewed since 2010.  I got a case study from 2013, an attempt to change the DSM for narcissism due to it's actual granularity and subtypes from 2008, and a letter to the journal of Indian Pscy med from 2012.


  
  Seishin Shinkeigaku Zasshi. 2013;115(4):363-71.
  
  
  [A case of major depressive disorder barely distinguishable from
  narcissistic personality disorder].
  
  [Article in Japanese]
  
  Saito S, Kobayashi T, Kato S.
  
  Department of Psychiatry, Jichi Medical University.
  
  The recent increase in cases of depression with a narcissistic
  tendency, especially among young individuals, has been pointed out.
  When the narcissistic tendency is conspicuous, patients may be treated
  for a personality disorder or pervasive developmental disorder, and
  not for a mood disorder. A case is described of a man in his late
  twenties who developed depression due to his failure in research work
  and job hunting, and, after a time, due to the break off of his
  engagement with his fiancée, manifested with narcissistic symptoms
  including an exaggerated opinion of himself, a sense of entitlement,
  interpersonal exploitation, lack of empathy, strong feelings of envy,
  and an extrapunitive tendency. He was regarded at the start of
  treatment as having narcissistic personality disorder. However,
  persevering treatment, mainly with supportive psychotherapy and
  pharmacotherapy including antidepressants (high dose of maprotiline
  combined with low dose of mirtazapine), sodium valprote and
  aripiprazole, finally improved not only his depressive symptoms, but
  also the symptoms regarded as a deriving from a personality disorder.
  He presented fierce  anger and aggression regarded as a mixed state,
  and showed the rapid improvement  in his depressive state after
  hospitalization, which we considered to show potential bipolarity. We
  diagnosed the patient with narcissistic depression, emphasizing the
  aspect which suggested a mood disorder, such as the episodic presence
  of narcissistic symptoms as long as a depressive state resided, his
  circular, recursive discourse, and his potential bipolarity. To
  accurately evaluate the aspect of mood disorders which patients
  appearing to show personality disorders have, it is considered useful
  to grasp a patient's condition from the viewpoint of a personality
  structure and viable dynamics. From a therapeutic standpoint, we
  suggest the importance of simple but persevering psychotherapy and a
  sufficient quantity of antidepressant medication for patients with
  depression, even if they are thought to have a personality disorder.
  
  PMID: 23789317  [PubMed - indexed for MEDLINE]


Hmm well they seem to note initially that the converse is true in the first sentence.  We'll investigate why this is true soon too and the reasons for it.  

Before even reading this, I hypothesized someone with bipolar disorder could have this type of problem...and sure enough...they mention the patient as potentially having it.



This one is back from 2008.  It seems like they were having some trouble with the DSM labeling of the disorder back then.  Apparently there are several different subtypes of narcissistic disorder, which could definatly seem viable.  So, so far your answer is 'sometimes'.


  
  Am J Psychiatry. 2008 Nov;165(11):1473-81. doi: 10.1176/appi.ajp.2008.07030376. Epub 2008 Aug 15.
  
  
  Refining the construct of narcissistic personality disorder:
  diagnostic criteria  and subtypes.
  
  Russ E, Shedler J, Bradley R, Westen D.
  
  Department of Psychology, Emory University, Atlanta, GA, USA.
  jonathan@shedler.com
  
  Comment in
      Am J Psychiatry. 2008 Nov;165(11):1379-82.
  
  OBJECTIVE: Narcissistic personality disorder has received relatively
  little empirical attention. This study was designed to provide an
  empirically valid and  clinically rich portrait of narcissistic
  personality disorder and to identify subtypes of the disorder. METHOD:
  A random national sample of psychiatrists and clinical psychologists
  (N=1,201) described a randomly selected current patient with
  personality pathology. Clinicians provided detailed psychological
  descriptions of the patients using the Shedler-Westen Assessment
  Procedure-II (SWAP-II), completed a  checklist of axis II diagnostic
  criteria, and provided construct ratings for each axis II personality
  disorder. Descriptions of narcissistic patients based on both raw and
  standardized SWAP-II item scores were aggregated to identify,
  respectively, the most characteristic and the most distinctive
  features of narcissistic personality disorder. RESULTS: A total of 255
  patients met DSM-IV criteria for narcissistic personality disorder
  based on the checklist and 122 based on the construct ratings; 101
  patients met criteria by both methods. Q-factor analysis identified
  three subtypes of narcissistic personality disorder, which the authors
  labeled grandiose/malignant, fragile, and
  high-functioning/exhibitionistic. *Core features of the disorder
  included interpersonal vulnerability and underlying emotional
  distress, along with anger, difficulty in regulating affect, and
  interpersonal competitiveness, features that are absent from the
  DSM-IV description of narcissistic personality disorder.* CONCLUSIONS:
  These findings suggest that DSM-IV criteria for narcissistic
  personality disorder are too narrow, underemphasizing aspects of
  personality and  inner experience that are empirically central to the
  disorder. The richer and more differentiated view of narcissistic
  personality disorder suggested by this study may have treatment
  implications and may help bridge the gap between empirically and
  clinically derived concepts of the disorder.
  
  PMID: 18708489  [PubMed - indexed for MEDLINE]


And the story gets more complicated...to the point where there seem like many different types of treatment and just problems with therapists dealing with narcissists. 

Q-Type Analysis:


grandiose/malignant
fragile
high-functioning/exhibitionistic


Core features of the disorder


included interpersonal vulnerability and underlying emotional
distress, along with anger
difficulty in regulating affect
interpersonal competitiveness


Looks like your question's answer is getting split up in many different ways.



I found this interesting letter that was sent to the Indian Journal of Psych Med.  It looks like there are specific type of strategies for dealing with specific types of issues....like for relationship issues there's one way, for other types...there's another.

I'll bold the interesting parts.


  Indian J Psychol Med. 2012 Oct-Dec; 34(4): 403–404. doi: 
  10.4103/0253-7176.108236  PMCID: PMC3662146  Demystifying Paradoxical Characteristics of Narcissistic Personality Disorder  Matthew
  Gildersleeve Queensland University of Technology, Brisbane,
  Queensland, Australia Address for correspondence: Dr. Matthew
  Gildersleeve, Queensland University of Technology, Brisbane,
  Queensland, Australia. 
    
  Sir,
  
  This letter is aimed for psychotherapy clinicians and researchers who
  should acknowledge the relationship linking Kohut's self-psychology
  and Glasser's Choice theory that can demystify relationship
  difficulties and mental health problems in narcissistic personality
  disorder (NPD). NPD is commonly experienced interpersonally by others
  as insufferable, pompous, and un-empathic.[1] NPD persons have been
  identified to possess giant self-centeredness, a certainty that they
  own supreme personality, and their humiliation of others makes them
  intolerable for interpersonal relations.[1] Importantly, Heinz Kohut's
  legacy to psychology is known as self-psychology and was centered
  principally on narcissistic personality development and treatment.[2]
  Suboptimal psychological development is thought to arise when maternal
  compassion is discriminately substandard.[3] As a result, the
  narcissistic self constructs a defense against the helplessness of a
  hurtful world.[3] Kohut[2] cited in Banai et al.[3] called the
  compassion required from maternal figures as “self-object needs”
  because these needs develop the self-image and are provided by
  external objects.     (Oh wow, it seems like they're talking about entitled rich kid's attitudes, that's kinda funny, interesting).
  
  By not receiving necessary self-object transferences through decisive
  epochs in development, the young individual cannot build the
  competence to control self-respect or construct a positive
  self-image.[3] *Consequently, the child, now an adult, depends on other
  humans to construct their self-image. The self-object transferences
  received as an adult provide a feeling of significance, which was not
  established during child development.[3] However, NPD persons are
  apprehensive of meeting self-object absence as an adult.[4] In order
  to feel the control of their fate, NPD persons present a mindset of
  dominance in the interpersonal sphere. As a result of this
  authoritarian manner, persons with NPD typically have a record of
  numerous unsuccessful relationships.[4]*
  
  Go to: PARADOXICAL CHARACTERISTICS IN NARCISSISTIC PERSONALITY
  DISORDER Thus far, this letter has acknowledged that NPD persons rely
  heavily on self-object transferences to develop a positive self-image.
  The behavioral characteristics of NPD persons reflect this need and
  are well documented.[5] However, what is paradoxical about these
  behavioral characteristics is that instead of behaving in a way to
  increase the chance of receiving self-object transferences in
  relationships, NPD individuals act in a way to reduce that possibility
  by destroying interpersonal relations.
   (So not only have we seen narcissists become depressed...they also have the propentencity to do things in relationships that sabotage them....which may then lead to this depression.)
  
  Glasser[6] has specified relationship building and destroying behavior
  in a grand detail in his Choice theory. “Seven Caring Habits” and
  “Seven Deadly Habits” offer superb rules for how psychotherapists
  should interact with clients to enhance the likelihood that these
  individuals use caring interpersonal habits to attain optimal mental
  health. It is evident from the literature that NPD behavioral
  characteristics reflect the “Seven Deadly Habits.”[1] Glasser's Seven
  Caring Habits are Supporting, Encouraging, Listening, Accepting,
  Trusting, Respecting, Negotiating differences and the Deadly Habits
  are Criticizing, Blaming, Complaining, Nagging, Threatening,
  Punishing, Bribing, or Rewarding to Control.
  
  Go to: CHOICE THEORY The writing of Kohut and advocates of
  self-psychology argue that the feeling of love, belonging, closeness,
  and connectedness with other humans are essential for individuals with
  NPD who requires self-object transferences.[7] Unfortunately, the
  pushing, demanding actions (Seven Deadly Habits or External Control
  Psychology) being used by NPD persons destroy relationships and
  therefore prevents self-object needs being met. When external control
  is used by NPD persons, it will destruct the capacity of one or both
  individuals to locate contentment, eventually resulting in severed
  relationships.[8] This interpersonal disengagement is argued to be the
  foundation for the majority of human mental illness.[6] Choice Theory
  and the Seven Caring Habits are offered to replace external control
  psychology and the Seven Deadly Habits[6] to preserve relationships
  and optimal mental health.
  
  External Control Psychology is an attempt to control others to act in
  a way they do not want to.[6] This ideology of a person who uses
  external control does not permit individuals outside the self to
  formulate preference about individual freedom, and advocates that
  other individuals should be punished to modify their behavior to
  attain the controllers' needs.[6] The “Deadly Habits” demolishes
  individual freedom of the oppressed individual and therefore acts to
  disconnect relationships, as freedom has been identified as one of the
  basic human needs.[6]
  
  Consequently, a central thesis of Choice theory is that the only
  individual one can be in command of is themselves.[6] If the
  individual believes they can command other humans, then they will
  encounter anger and irritation leading to mental illness.[6] Anger,
  irritation, and mental illness will also arise if the individual
  believes that other humans can command them and then externalizes
  blame to the perceived controller for undesirable events.[6] For that
  reason, it is vital for the NPD individual to focus on internal
  control of their own choices and to value the rights of other people
  who have their own needs.[6]
  
  In conclusion, it is important that the caring habits be taught to the
  NPD client, once a therapist has identified an individual with strong
  self-object needs and who meets the criteria for NPD. Using Choice
  theory, the psychotherapist directs an individual toward fulfilling
  interpersonal relationships and educates the person to relate in more
  helpful modes using internal control psychology.[6] The better NPD
  persons are proficient at bonding and comprehending other individual
  needs, the better prospect they possess to receive positive
  self-object transferences and happiness.
  
  Go to: ACKNOWLEDGMENTS Thank you to Amy-lee Weisse for constructive
  discussion and invaluable guidance.
  
  Go to: REFERENCES
  1. Millon T, Millon CM, Meagher S. Hoboken, New Jersey: John Wiley &amp; Sons; 2012. The Narcissistic Personality. Personality Disorders in
  Modern Life; p. 330.
  2. Kohut H. Chicago: University of Chicago Press; 2011. Introductory Considerations. The Analysis of the Self: A Systematic Approach to the
  Psychoanalytic Treatment of Narcissistic Personality Disorders; p. 1.
  3. Banai E, Mikulincer M, Shaver PR. “Selfobject” needs in kohut's self psychology: Links with attachment, self-cohesion, affect
  regulation, and adjustment. Psychoanal Psychol. 2005;22:224–60.
  4. McLean J. Psychotherapy with a Narcissistic Patient Using Kohut's Self Psychology Model. Psychiatry. 2007;4:40–47. [PMC free article]
  [PubMed]
  5. Silverstein ML. Washington, DC: American Psychological Association; 2007. Narcissitic Personality Disorder, Disorders of the Self: A Personality-Guided Approach; p. 27.
  6. Glasser Bloomington: IUniverse; 2011. Replacing External Control With The New Choice Theory Psychology. Take Charge of Your Life: How
  to Get What You Need with Choice-Theory Psychology; p. 8.
  7. Strack Hoboken, New Jersey: John Wiley &amp; Sons; 2005. Self Psychological Foundations of Personality Disorders. Handbook of
  Personology and Psychopathology; p. 181.
  8. Glasser , Glasser New York: Harper Collins; 2007. External Control Can Kill a Marriage. Eight Lessons for a Happier Marriage; p. 11.
  Linkback here: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3662146/




So, it looks like there's alot of stuff going on with Narcissists.  Or what they call "NPD."  

As for my conclusions:

NPD or (Perceived NPD) or actually scientists are still trying to figure it out I'm going to put into three categories that even have subcategories.

1)  Being the center of attention and always getting what you wanted
while growing up...only to realize when it times come to get a job
that doesn't exist anymore - which can admittedly be a difficult
shift for someone to have to make.  This could also stem from
derivatives of this.  Obviously would say psychopathology here and environmental    influencers are important players.**
The affects of this seem to appear as relationship issues mostly - as
they have developed a certain "expectation for this or that" which
puts stress on their mate....whom then eventually leaves
them....which then causes them to be a depressed narcissist.  This
cycle also seems to repeat itself although methods are suggested to
help treat a patient with this disorder in the last piece of
literature.

2)  Genuinely having some subtype of NPD that is more than just psychopathologically based.
This goes back to that 2nd study where they were trying to identify the subtypes for the DSM definition.  These adjectives don't seem to describe someone who would necessarily fit into category #1, although they partially seem to discribe someone who would fit into my 3rd category - someone who is simply bipolar and has a "narcissistic mania."  And yes, I just made that medical diagnosis up.

Q-Type Analysis (the authors labeled these as the three subtypes):


grandiose/malignant 
fragile
high-functioning/exhibitionistic


Core features of the disorder (NPD)


included interpersonal vulnerability and underlying emotional
distress, along with anger
difficulty in regulating affect
interpersonal competitiveness


So I actually don't really believe many #1's would fit into this #2 category I have set up due to the lack of focus on problems in certain types of relationships (they mention interpersonal failures...but not as directly).

I'd say these are most likely people with a true "NPD" pathology - with  a couple bipolar's mixed in depending upon if their methodologies were very affective at weeding them out and since it's a Q-type analysis...I'd feel somewhat unconfident about that.

3)  Someone who is bipolar and when they have their manic episode, they become narcissistic.  Obviously they'd go up and down and have all sorts of fun problems.

Answer to your question:

They can be both, either/or, have it depend upon things like interpersonal issues because they feel like the world owes them something. Apparently the pathology of narcissism is a very complex thing to figure out or put any sort of hard and fast label on.  It could be caused by one's psychology from how they were raised or a genuine mental disorder of a physiological kind. There's also problems with distinguishing it from bipolar disorder (although I'd say if someone had bipolar disorder then they'd probably know it).