How does low self-esteem lead to Pecola's identity crisis?

Your question must be referring to Pecola Breedlove, the protagonist of The Bluest Eye by Toni Morrison. Low self-esteem has taken a significant tall on Pecola's life to the point of utter desperation. Apparently, this young girl suffers the cruelty of her parents, classmates and other people in the community but blames everything on her "ugliness." Pecola Breedlove is obsessed with blue eyes, which according to her, is a sign of beauty. She delusively thinks that such eyes will change the way people perceive her. In fact, lack of self-confidence has forced Pecola to live in a fantasy world as she ultimately comes to believe her wish has been granted. As the novel ends, Pecola goes mad and manufactures an imaginary friend who becomes her only conversation partner.

The central character in Toni Morrison's novel The Bluest Eye is Pecola Breedlove, a young girl who prays for blue eyes, as she sees blue eyes as a symbol of beauty. Pecola has grown up in the home of an abusive father and a neglectful mother. The town she lives in is full of people who mock and degrade her, including classmates and other children who claimed to be her friend. This constant teasing and abuse, plus the nonexistent self-esteem of both her parents, leads Pecola to believe she is ugly. She also comes to believe that if she were granted blue eyes, she would be beautiful, and no one would tease or torment her anymore.
Pecola does not give her own appearance much thought beyond categorizing herself as ugly, and her low self-esteem is reinforced by the people surrounding her. Pecola fervently wishes to change her appearance, believing this will lead her to a happier, and more acceptable, sense of identity. By the end of the story, Pecola cannot take any more abuse and degradation, and she goes insane. She believes herself to have been granted blue eyes and spends the rest of her days talking to an imaginary friend about how beautiful her new blue eyes are. In her madness, Pecola's entire sense of identity has shifted, and she believes wholeheartedly that this new identity is the key to beauty.