Wind power is undergoing a rapid development in many countries and has gained greater attention as the penetration of wind power continues to grow. To ensure reliable and efficient operation and planning of large amount of wind power resources, the impact of wind power on the power systems need to be carefully examined. This paper attempts to evaluate the impact of wind power variability on the efficient operation of day-ahead electricity markets. An approach to adjust wind hourly variability is presented, and full-year simulations have been carried out on much of the US Eastern Interconnection power systems. The simulation includes six wind variability levels in conjunction with three wind penetration levels to reveal a complete picture of the impact of wind variability. Detailed results quantifying the impact are presented including production cost, load cost, LMP, thermal generation and wind curtailment.