The cause of the allergies might be dry skin but I think the key to that is not so much how often you bathe but what products do you use and do you rinse them out completely. If it is allergies this sounds like a contact dermatits...specific to the additives in the shampoo. You might want to try a shampoo that is fragrance and additive free. Often oatmeal shampoos (available from your vet) are good..petsilk makes a shampoo with no additives.
It's getting colder so our babies are more prone to dry skin. I knew that my babies had dry skin by looking at their tummy. I can see the flaky skin. I used the oatmeal condtioner. You can find it at any petstore that sells shampoo products. Make sure you read the directions to see how long you're suppose to leave it on.
How often do you give your baby a bath? Do you see any flakiness? Did you do any sort of changes to their diet/food?