Could this possibly be a flea allergy? (remember you do not necessarily have to see the actual fleas, the allergy can be caused by exposure to the fleas' poo!)
I would get some good flea treatment prescribed from your vet first, and see how that works (rather than buying over-the-counter. If you got the wrong stuff, it could cause problems)
IF that doesn't work, and you're back to square one, than you could think of possible food allergies. But I would try the flea treatment first.
Long shot but...a lot of little dogs wear harnesses and not collars. If your dog has a harness, could it be rubbing in this area? Sometimes a harness made out of stiff material will cause this even if it isn't too tight.